Your first business decision should determine whether you want to sell products or services. That decision dictates the kind of personnel, premises and marketing you need. Each type of offering requires different approaches and skills, and each one has different problems that you must overcome. Take your time in making your choice. Your personality and talents may then work better for either a product or a service business.
Advantages of Selling a Product
Products offer a uniform solution to customers' problems. If you sell products, you sell identical versions to numerous customers. You may offer advanced or improved versions of products, but even those remain very similar to each other. Your prospects can evaluate features before they buy, and if you do not sell to one prospect, you can try to sell the same item to another prospect. When you sell a product, you can focus more on selling than on customizing the product.
Disadvantages of Selling a Product
You must store inventory when you sell products. Whether you manufacture goods or purchase them for resale, you must constantly estimate how much you need on hand to meet demand. That means you spend money on products before you make any income from them. You have warehousing and personnel costs for inventory, along with losses due to damage and theft. You must constantly tweak sales projections so that you know how much inventory to order.
Advantages of Selling a Service
When you sell a service, you sell an intangible. You do not have to limit your pitch to pre-existing features, because you can adjust the features of a service to meet the needs of each client or customer. You can emphasize aspects of your service that will solve your prospect’s problems or satisfy their needs and you can offer a trial period for using your services. If the customer does not keep the service, you do not have used goods on your hands to dispose of.
Disadvantages of Selling a Service
You can find it difficult to describe your service to prospects. In fact, people you pitch to may not be able to visualize what you do. You can counter this somewhat by focusing on how your service benefits customers, but even then you may have to repeatedly articulate why your service has value. Customers may express more reluctance when buying a service, because unlike a product, they can’t evaluate it before they use it.