You don’t need more SKUs—you need better ones.
Distributors in the glass, ceramics, and refractory sectors are waking up to a hard truth: SKU count doesn’t correlate with profitability. In fact, it often works against it.
The smart play isn’t just trimming underperformers—it’s realigning your SKU portfolio around margin leaders and project pull-through potential.
Step 1: Identify High-Margin Niches
Margins aren’t static—they’re contextual. Use your sales data to identify:
High-margin verticals (e.g., healthcare-grade ceramics, ballistic-rated glass, tundish linings)
Channels that support value pricing (e.g., OEMs vs. resellers)
SKUs with add-on opportunities (e.g., a tile line that supports trims, corners, and accessories)
Double down on these product families—even if volumes are lower.
Step 2: Use Margin-Weighted Scoring
Evaluate SKUs based on:
Gross margin %
Inventory turnover
Strategic value (spec-in potential, exclusivity)
Differentiation level
Then rank and bucket them:
A-tier: Retain and promote
B-tier: Review or bundle
C-tier: Flag for retirement
Step 3: Adjust Sales Incentives
Many sales teams push volume, not value. Realign quotas and bonuses to reward:
Higher GM dollar contribution
Attachment of premium or value-added SKUs
Conversion of MTO orders into repeatable stock lines
Step 4: Rationalize Redundant Tiers
Are you carrying four versions of the same function at slightly different price points? Customers can’t tell them apart—and sales can’t push them clearly. Keep the high-margin winner and simplify the message.
Product strategy is P&L strategy. By trimming clutter and focusing on high-margin SKUs that drive add-ons, compliance wins, or service revenue, you’ll make every pallet you move more profitable—and easier to sell.
