Cross-selling is a strategy that promotes products to current customers based on their current or past purchases. It is the practice of promoting and recommending complementary items and / or services related to the item that has either been selected or purchased.
This strategy is based on the fundamental economic concept of complementary goods. For example, people who buy hot dogs usually need hot dog buns. Hot dog buns is therefore a complementary good.
Amazon is a massive online marketplace and is currently the largest online-based retailer in the United States. Amazon attributes 35 percent of all sales through the cross-selling tactic.
Cross-selling can be used in many ways and in many settings. In the online spectrum, shops often suggest what other customers have purchased with an item. For example, in the e-commerce industry, Amazon expresses this as
“Customers who bought items in your shopping cart also bought…”
For bricks and mortar businesses, this can be applied through displays or recommendations. In grocery stores, complementary goods are usually displayed together (i.e. ketchup and mustard). For service based businesses like insurance companies, car washes, or beauty salons, employees can suggest complementary services to the customer. For instance, a salon employee can recommend eyebrow waxing along with a facial.