Problem Statement

A company selling handicrafts on Amazon has experienced a decline in sales over time. The management is trying to identify the reasons for this decline.

Possible Reasons

Let's start with identifying the possible reasons for the decline in sales:

1. Increased competition: The company is facing stiff competition from other handicraft sellers on the platform, resulting in lower sales.
2. Poor product quality: Customers may have received low-quality products, leading to negative reviews and a decline in sales.
3. Inadequate product range: The company may not be offering a diverse range of products, leading to lower sales as customers seek variety.
4. Inadequate marketing: The company may not be marketing its products effectively, leading to lower visibility and sales.
5. Pricing strategy: The company's pricing strategy may be uncompetitive compared to other sellers, leading to lower sales.
6. Poor customer service: The company may not be providing adequate customer service, resulting in negative reviews and a decline in sales.

Addressing the issues

Based on these possible reasons, we can create a MECE tree-structure to identify the root cause and develop a plan to address the issue:

Increased competition

• Identify key competitors and their pricing strategies
• Analyze customer reviews of competitors to identify areas of improvement
• Develop a pricing strategy that is competitive with key competitors
• Implement promotional campaigns to increase visibility and attract customers

Poor product quality

• Identify the product categories with the highest negative reviews
• Conduct an analysis of the production process to identify areas of improvement
• Implement quality control measures to improve product quality
• Develop a customer feedback system to monitor product quality and address any issues promptly

Inadequate product range

• Conduct market research to identify popular product categories and trends
• Develop a product range that offers a diverse range of products in popular categories
• Implement a product launch plan to promote new product offerings

Inadequate marketing

• Analyze current marketing efforts and identify areas of improvement
• Develop a comprehensive marketing plan that includes targeted advertising and social media campaigns
• Implement a customer referral program to encourage existing customers to promote the company's products

Pricing strategy

• Conduct market research to identify key competitors and their pricing strategies
• Analyze the company's cost structure to identify opportunities to reduce costs
• Develop a pricing strategy that is competitive with key competitors while maintaining profitability

Poor customer service

• Conduct a customer feedback analysis to identify areas of improvement in customer service
• Develop a customer service training program for all employees
• Implement a customer service monitoring system to track and address customer complaints

By addressing the root causes of the decline in sales, the company can regain its market position and improve its sales performance.

Dhanaay Can Help

This is just an illustration of the kind of problems faced by businesses. Dhanaay offers business consulting and customised solutions to help solve these kind of issues. If you or someone in your network needs assistance, feel free to connect with us. Also, subscribe to our blog to get latest updates and insights.