How to Protect Profitability and Focus Your Growth Strategy
In e-commerce, more isn’t always better. While expanding your catalog can feel like growth, holding on to underperforming or unprofitable products can quietly drain resources, clutter operations, and confuse your marketing strategy.
Sometimes, the smartest move isn’t to launch something new—but to cut what no longer works.
This post breaks down the signals to watch for, how to evaluate your SKUs objectively, and why trimming your catalog can lead to higher profits, faster growth, and better customer experiences.
Why Cutting Products Is Good Business
Removing SKUs isn’t a failure—it’s focus.
Brands that regularly review and prune their catalog tend to:
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Reduce fulfillment complexity
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Improve inventory turnover
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Lower storage and holding costs
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Free up ad budget for winners
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Improve conversion rates by removing choice overload
Signs It’s Time to Cut a Product
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Low Sales Volume Over Time
If a product hasn’t moved consistently in 90–180 days, it may be tying up space and resources.
Tip: Don’t just look at raw sales—analyze by channel, season, and promotion cycles to confirm the trend. -
Negative or Thin Profit Margins
A product might be selling—but losing money after ads, shipping, returns, or discounts.
Watch for:-
Low ROAS or high blended CAC
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High return rate
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Heavy discounting to move units
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Operational Headaches
Some products create outsized problems:-
Fragile or hard to pack
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Frequent mis-picks or shipping damage
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High customer complaint rate
Even if they’re profitable on paper, the operational burden may not be worth it.
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No Longer Aligned With Your Brand
If a SKU no longer fits your niche, your audience, or your message—it can dilute your brand value and confuse your customers.
Example: A premium tool brand still carrying ultra-low-end items “just in case.” -
Inventory Risk or Shelf Aging
Are you holding 100+ units of a slow seller? That’s working capital you could be using to restock bestsellers or launch new SKUs.
Tip: Use a 3-month sell-through threshold to flag aging stock.
How to Evaluate What to Cut
Use Data to Make Confident, Context-Driven Decisions
Before you start slashing SKUs, remember:
⚠️ This process isn’t one-size-fits-all. The numbers below are illustrative examples only. What qualifies as “underperforming” will vary depending on your business model, margins, industry, and product lifecycle.
That said, here’s a basic evaluation matrix you can adapt:
| Product | Revenue | Profit Margin | Return Rate | Days Since Last Sale | Cut? |
|---|---|---|---|---|---|
| SKU A | $2,200 | 8% | 12% | 112 | ✅ Yes (Low profit, aging) |
| SKU B | $7,500 | 32% | 2% | 12 | ❌ No (Healthy performance) |
| SKU C | $900 | -6% | 5% | 184 | ✅ Yes (Losing money + stale) |
What to Consider:
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Is the product seasonal or evergreen?
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Are the margins consistently low, or was that due to temporary ad spend or discounting?
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Has it had adequate exposure (e.g. ads, listings, email) to judge its true potential?
The goal isn’t to eliminate products quickly—it’s to identify which ones no longer serve your business profitably or operationally.
What to Do With Products You Cut
Don’t just delete them—have a plan:
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Bundle slow-movers with bestsellers
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Clearance Sale to liquidate stock
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Email existing customers who bought similar items
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Redirect retired URLs to similar or updated SKUs to preserve SEO equity
Final Takeaway
Cutting products doesn’t mean cutting growth. It means protecting your margins, clarifying your brand, and focusing your energy on what moves the needle.
Whether you do this quarterly or once a year—pruning your catalog is a growth strategy.
Want Help Auditing Your Product Line?
Use this checklist:
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Do 80% of sales come from 20% of SKUs?
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Are you still advertising SKUs that haven’t sold in 90 days?
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Are you prioritizing new launches over fixing what’s underperforming?
If yes, it might be time to clean house.
👉 Contact Modonix: https://modonix.com/contact-us
