Sometimes the Fastest Way to Grow Is to Shrink (Your SKU Count)

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As a consumer products business starts to take off, something else often grows right alongside it. The product line. More items, more colors, more variations. On the surface it looks like momentum. But behind the scenes, profitability can start to slow down.

Those new items that felt like no-brainer add ons to your ecommerce business do not always perform the way your core products did. So what now?

Some teams stop launching altogether, worried about adding more complexity. Others keep creating new products, hoping the next one will be the hit they need.

In both cases, decisions are often being made without a clear view of what is actually profitable.

This is where SKU rationalization becomes powerful. (A SKU, or Stock Keeping Unit, is just a unique product or variation.) And very often, less really is more.

What to Review When Your Product Line Starts Feeling Heavy

1. Revenue is not the same as profit

A product can sell well and still fall short once you factor in the full cost to make, store, ship, and support it.

Are new SKUs generating incremental sales, or simply shifting customers from one item to another?

Variation should be intentional. Multiple colors or flavors may look appealing but can add more drag than value.

Think about the early iPhones. One or two colors. Eventually four. Just enough.

2. Know the total cost behind each product

Profitability goes beyond materials and labor. Packaging, tariffs, freight, warehouse space, and distribution all matter. And some costs are not financial. Which SKUs drain your time or keep you up at night?

Be mindful of amortized costs as well. When a mold, machine, or setup is shared across multiple SKUs, removing one may raise the cost of the remaining ones.

3. Avoid pricing in a vacuum

Customer value and business viability must meet in the middle.

Pricing needs to work for the customer and still cover the true cost to produce and fulfill the item.

Consider whether your assortment includes:

A clear entry point

A thoughtful range of price tiers

A margin structure that supports long-term growth

4. Storage and shipping matter more than most teams realize

Every SKU takes space in shelves, cartons, software, and workflow.

A streamlined assortment leads to faster picking, fewer errors, and more efficient use of space.

Selling 100 units of one SKU is often more profitable than selling 50 units each of two, even if the top-line revenue looks identical.

5. Advertising has limits

Marketing budgets can only stretch so far.

When your spend is spread across too many items, it becomes harder to build momentum behind any of them.

Some products deserve the spotlight. Others perform better supporting the line quietly.

The Goal Is Not to Shrink. The Goal Is to Strengthen.

SKU rationalization is not about cutting for the sake of cutting.

It is about understanding what drives profit, what creates drag, and where focus will unlock your next stage of growth.

You do not need to double your revenue to grow your profit.

You just need to know what to prune.

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About ZAZ Business Solutions

Lauren Zaslansky Conner is the founder of ZAZ Business Solutions.

ZAZ helps founders uncover the hidden profit in their product line by looking beyond top-line sales to understand:

Which SKUs truly drive contribution margin

Which items drain space, ad spend, or team focus

How to simplify without sacrificing revenue

Before founding ZAZ, Lauren spent over two decades leading product, operations, and growth at both global brands like Disney and MGA and at early-stage startups finding their footing. That mix of scale and scrappiness shapes how she evaluates product decisions, because she understands the pressures and opportunities that come with building a business at any stage.

And at ZAZ, we value both the numbers and the story of your business. Data shows what is happening. Your story explains why. Healthy decisions require both.

If you are ready to evaluate your assortment and grow more intentionally, I would be happy to help.

Learn more at www.zazbusinesssolutions.com.

https://www.linkedin.com/in/laurenzaslanskyconner

📸 Sequoia National Park 2019:

Real growth starts with deep roots. Prune wisely, grow intentionally