Bismarck's change on policy was not as dramatic as people think. Bismarck was pro-expansion, but not in the way that the other traditional powers were going about it. Bismarck recognized that the majority of colonies were rarely profitable for the country managing them. His approach was to allow private entities to create and maintain the colonial areas of Germany. Bismarck was more interested in ostsiedlung or eastward expansion as a way of bringing more wealth and resources to Germany by settling in Polish regions. This was similar to Russia and USA's colonial expansion.

Corporations are no better at maintaining colonies than states and predictably began losing money and lives. Corporations hate losing money, so rather than Germany appear to be weak and a failure Bismarck was forced to slowly bring colonies under greater and greater protection until they were virtually state run anyway. Some people think Bismarck used the colonies as a way to increase his political power by fueling nationalism, but some people would try to find a way to make every decision Bismarck made, down to his breakfast choice, appear to be a political masterstroke.

Despite colonies lack of profit generation, Bismarck did recognize that unregulated capitalist systems lead to boom and bust cycles. These cycles were politically devastating, not to mention deadly (See: Ireland, Potatoes.) Colonies were useful as a way to regulate the economy by providing resources not bound to the free hand of the market. Slave labor camps strip mining whole nations in Africa and selling the goods at a loss to German factories has a way of calming the economy, and people's political concerns at home.

Sources: Wehler, Hans-Ulrich. "The German Empire 1871-1918"

Blackbourn, David; Eley, Geoff. "The Peculiarities of German History"

It was a pretty massive deviation. Germany didn't have any colonies up to this point and didn't seem at all interested in obtaining any. After the Franco-Prussian War for example the French tried to offer the Germans colonies in Indochina as part of the piece deal, but were summarily rejected by Bismarck. The decision to pursue colonies was particularly interesting due to how fast Bismarck changed his mind and turned his back on the whole affair. He only pursued overseas colonization for a few years before deciding to stop and focus exclusively on European affairs.

Thomas Pakenham's "The Scramble for Africa" would be a useful source for you to check out. It covers this in some detail. The TL/DR is basically what the other posters have already said.