Our current website that sells blue widgets ranks in the top #3 in all major SE for pretty much all of our main key words.We are expanding our business to sell blue waggles. Would it be better to create a new domain name or a subdomain? People interested in buyig the blue widgets would also be interested in the blue waggles as they are related. Lets say the blue widets are light bulbs and the blue waggles are light fixtures.
Both a new domain and a new subdomain are treated as separate sites from the original site.
Assuming you don't want to combine the two into one site, one advantage of a subdomain is that you can share cookies with the main site. That means that you can combine the backend and ordering processes. You present a more coherent appearence to your users too.