Managing E-commerce Product Types

One of the more challenging aspects of planning and executing a solid e-commerce solution is managing products. As with many online retailing aspects, product presentation must be carefully analyzed and structured to accommodate your selling and fulfillment workflows.When we work with our clients, the two most complex discussions deal with products and shipping. In conventional retail, we're able to easily handle both, but e-commerce requires very careful attention to detail. Selling online, in most cases, means never having a personal interaction with the customer. Therefore, the ability of the customer to make a desired selection and receive what they order demands an almost scientific approach. The "art" comes in marketing.(That's why we — novusweb^® — are the "Art & Science of E-commerce.")For now, though, let's explore the science side of product management by describing the various product types with which we deal in e-commerce. We will also briefly describe how these product types are handled by two of today's most popular platforms: Magento and Shopify. Other platforms behave similarly to these two. We haven't found any others, yet, that approach product types in other ways. It is important to note that how Magento and Shopify handle product types are quite different, and the products and types you wish to use can greatly influence which platform you decide to use.

Simple Products

A bit of a misnomer, to be sure, as there are truly no "simple" products. However, we use this term to refer to those products that are without different sizes, colors or other customer choices. For example, if you're selling a #2 pencil, you may want to present it without any options. If a customer sees your page for this pencil, there are no options to contemplate. The only choice for a customers is whether to add it to their cart or not.Of course, you've already asked, "what if I want to give them a choice of a yellow or blue pencil? A #2 or #3 lead?" Well, now you've just left the world of the Simple Product. Any choice you wish to offer a customer moves you into a Complex Product type.

Complex Products

Everything except the Simple Product type is what we call a Complex Product Type. And there are several within this category.

Variant Products

Continuing with our pencil, let's assume you have the same pencil in two colors — yellow and blue — and you want to offer them on a single product page. Undoubtedly, you've seen these types of selections. Depending on the product, the choices might be size or color. It might be voltage or set pack (set of 4, set of 6, etc.).But, depending on your e-commerce platform, how you implement a Variant Product requires careful planning.Does each variant (e.g. Blue Pencil, Yellow Pencil) each have their own SKU (stocking keeping unit)? Are you tracking inventory for each SKU? Will you need to send a unique SKU to your fulfillment warehouse or dropshipper?If you do need to manage inventory for variants in Magento, you would create a configurable product type which is actually a virtual product that represents two or more individual Simple Products as one product to the customer, with selectable options.In Shopify, there are no such things as Simple and Complex product types. However, you can create variants for a product, each variant representing one of the choices a customer can make. For each variant, you can add a SKU, and you can decide if inventory is managed. If you have a shirt in 5 sizes and 3 colors, you would create 15 variants in Shopify, one for each size/color combination.

Customized Products

If you're not managing inventory for your pencils, you could elect to represent the color choices, without necessarily having individual SKUs or tracking inventory.In another case, you might sell a t-shirt where the customer can type in their name to be sewn on the front.These are Customizable Products as they aren't inventoried items and any SKU used doesn't completely define the completed product delivered to the customer. In Magento, you can add customized options to a Simple Product; in Shopify, you simply add variants for colors and sizes, but without inventory management. For the "name" type of customization in Shopify, you will need to use an add-on that allows customer inputs that are passed on with the order, such as Product Options from Bold Apps.

Component Products

Now, we're getting into even more complexity. But, if you want to be a true e-commerce merchant, it's important that you realize all the possible product type opportunities so you're making the best choice for presenting your wares.A Component Product is often exemplified by how computers are often sold online. It's not uncommon for a customer to select a base computer, then make additional selections for hard drive, RAM, monitor and so forth. Each component is usually a Simple Product, but may be represented as optional choices for the customer. This is in contrast to a Variant Product where a customer is required to make choices in order to add the product to their cart.Magento refers to these products as Bundled Products, which is a bit of a misnomer to us. Most in our industry consider bundles to be a kind of "Buy One, Get One" type of product offering. Or buy a cap with the jacket and get both for $20 off.Shopify has no native provision for creating Component Products, but Bold Apps does have a Product Builder add-on that accomplishes the same concept.

Kit Products

Let's say you keep blue and yellow pencils in stock. Furthermore, you have a nifty little pencil sharpener you stock. While you may sell each of these separately as Simple Products, you want to bundle these together — 3 blue pencils, 3 yellow pencils, 1 sharpener — and sell them as one product to customers. The actual kit, as we call it, will be assembled when ordered and, as such, is truly a virtual product in that it does not exist until assembled.Kits are very complex in that as the kits are sold, your inventory of pencils and sharpeners must be decremented and the new inventory quantities reflected on the Simple Product pages (or at least their availability is controlled by the amount of remaining inventory).For a much more in-depth discussion of product kits, see What is Product Kitting? from FitSmallBusiness.com, a wonderfully in-depth article on this subject.Neither Magento or Shopify can accommodate this product type. In fact, Kits are best managed on the backend by your inventory management or fulfillment system. As an example, we recommend and install Ordoro for many of our clients. Ordoro, originally a shipping solution, has truly evolved to handle inventory, including the building and managing of Kit Products.In essence, a Kit is built by combining various SKUs and the quantity of each to be included. Ordoro — or a compatible system — will then create a unique product and SKU for your store, to be used as a Simple Product. You can then set your price and description as you like. The available quantity of the Simple Product is based on the least available inventory of the kit components.For example, if you have 12 blue pencils and 8 yellow pencils and 16 sharpeners, and you want to include 3 of each pencil and 1 sharpener in each Kit, the most Kits you could sell would be 2, as you only have 8 yellow pencils and you include 3 in each Kit product.

Other Product Types

We've gone over the core of the physical product types, but there are also several non-physical product types. Downloadable music or software, extended warranties, event tickets and more represent other products that you don't inventory, but must be represented by your online store in ways that fulfill a customer's expectations for information and delivery. If a customer buys a music track, they expect to be able to download the music to their computer.

Map Your Products

The best approach is to work with a someone well versed in product types and go through the products you wish to sell. It is not an exercise best accomplished alone if you have little or no e-commerce product management experience.The following are just some of the questions we go through with our clients when mapping products types:

• Managed inventory?
• Unique SKUs?
• Barcodes/GTIN/ASIN?
• Inventory bin locations?
• Components and/or Kits?
• Taxable items? Tax-exempt?
• Pricing by customer types? Quantities? Destination?
• Shipping weight considerations? Overweight? Flats?
• Number of variant combinations? (Some systems have logical limits)

And there are many more.You can start, however, by surveying the Internet and looking at some of the ways other merchants represent products similar to yours. While there are lots of configuration choices dictated by your back office workflows and fulfillment, you can get a sense of how you wish to offer your products to your customers. See if you can match them to the types we discussed here.