If your reps are rewarded for volume, don’t be surprised when your warehouse fills up with one-off SKUs.
For many glass, ceramics, and refractories distributors, SKU rationalization and sales performance are on a collision course. Operations wants to trim dead inventory. Sales wants to say “yes” to every customer request. Left unchecked, this dynamic leads to a bloated catalog, fragmented stock, and warehouse inefficiency.
The root cause? Misaligned incentives.
Most sales teams are still compensated based on gross revenue or volume sold. That sounds fair—until you consider how that behavior manifests. A rep lands a small new account, agrees to carry an obscure ceramic setter plate or UV-tinted float glass, and suddenly a new SKU is born. It gets added to the ERP, stocked at MOQ levels, and maybe never reordered. Multiply that across 20 reps and 200 accounts, and you’ve got SKU sprawl.
So how do you align sales incentives with rationalization goals?
1. Compensate Based on Margin, Not Just Revenue
Tie sales bonuses to contribution margin after inventory carrying costs. That means a $10,000 order for a stock-core firebrick earns more than a $15,000 one-off order requiring custom sourcing and long lead times.
2. Flag “Non-Catalog” SKUs in CRM
Every time a rep tries to sell a non-standard item, make it part of the sales process to flag it as such. This allows purchasing and inventory teams to evaluate before it hits the warehouse. If approved, great. If not, it forces reps to guide the client toward standard alternatives.
3. Offer Incentives for Moving Strategic Inventory
Have slow-moving monolithics that are still valuable to certain customers? Incentivize reps to find homes for those products instead of adding new SKUs. Bonuses for moving aging stock can be powerful.
4. Collaborate on Rationalization Goals
Involve sales in the SKU cleanup process. Share the cost of bloated inventory. Let them see which SKUs are being cut, and why. Invite their input—sales reps often know which customers are emotionally attached to certain products.
5. Create a “Special Order” Playbook
Give reps a defined process for special requests. That might include a minimum order quantity, a deposit policy, or a lead-time disclosure they must share with the client. By formalizing special orders, you reduce the casual creation of fringe SKUs.
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Sales shouldn’t be the enemy of SKU rationalization—they should be your frontline allies. But that requires compensation models and workflows that reward strategic selling, not SKU proliferation. When incentives match business goals, everyone wins. Your warehouse gets leaner. Your margins get stronger. And your sales team gets smarter.
