Did you know bottom 20% of SKUs contribute just 2-3% sales for most CPG Companies!
(Source: Industry studies on CPG portfolio profitability trends)
Low-performing SKUs quietly erode your P&L and margins.
They demand time, effort, and resources without real returns.
Yet, many businesses avoid trimming their long SKU tails.
Here's why SKU rationalization should top your to-do list:
1. Simplify Marketing, Amplify Results
Focus your campaigns on winning SKUs for better ROI.
2. Stop Wasting Trade Dollars
Invest discounts and sampling in profitable, high-impact SKUs.
3. Slash Inventory Carrying Costs
Save on ordering, handling, case pick and semi-variable operational expenses.
4. Avoid SLOB (Slow and Obsolete) Write-offs
Short-dated stock causes stress and surprises in your P&L.
5. Boost Production Efficiencies
Smaller batches increase costs due to higher MOQ, change over timing etc.
Every business needs a structured SKU review process.
Do it every 1-2 years-your P&L will thank you.
Align SKU cuts with planogram reviews and new product launches.
Replace unproductive SKUs with your new products.
It's time to clean up and grow profitably!
Do you have an SKU rationalization strategy? Let's discuss in Comments below.
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