Sometimes the fastest way to grow is to shrink.

How to reduce sku count and improve profitability

Sometimes the fastest way to grow is to shrink.

SKU count, that is.

I’ve worked with dozens and consumer product brands. I’ve seen the same cycle again and again:

Growth takes off, and so does the product line. More flavors, more sizes, more SKUs. At first, it feels like momentum. But then, profitability slows down - if it was even there in the first place!

In big companies, we called it SKU rationalization.

I call it sustainable growth.

Some teams get scared and stop launching. Others keep adding more, chasing the next hit. Either way, they’re often not looking closely at what’s actually driving profit (or lack there-of).

Here’s what I look at when reviewing a product line:

• What’s the true cost of each item when you include materials, tariffs, labor, and shipping?

• Are your prices sustainable for the business and reasonable for the customer?

• Are new SKUs set up to bring in real incremental revenue, or just shifting sales around?

• Are you stretching your marketing and operations across too many products?

• Do your products still support your brand and your core customer?

• Growth and retraction tend to come in cycles. The key is knowing when it’s time to simplify.

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At ZAZ Business Solutions, I help leaders uncover the hidden profit in their product lines. We don’t just chase revenue. We build smart, intentional systems to grow what works and cut out what doesn’t.

You don’t need to double your revenue to grow your profit.

You just need to know what to prune.

PS- if you’d any to learn more, join me for a free Zoom session on the profitability on July 23 at 3pm ET/noon PT

https://lnkd.in/gXmQuhYe

📸 Sequoia National Park 2019: Real growth starts with deep roots. Prune wisely, grow intentionally