Protect revenue while pruning your catalog—yes, it’s possible with the right playbook.
Distributors know they need to trim bloated catalogs. But one roadblock always comes up: sales resistance. Sales teams often view every SKU as a potential commission, even if it’s moving once a year at a net loss. So how do you rationalize SKUs—cut the fat, not the muscle—without torpedoing morale or losing deals?
The answer is a structured SKU rationalization strategy that includes your sales force from day one.
Step 1: Build the Business Case with Data
Start with a profitability analysis that goes beyond sales volume. Consider:
Gross margin per SKU
Number of unique customers per SKU
Inventory turnover rate
Storage and handling cost
Show your sales teams that certain SKUs may be “winning deals” but losing money. For example, a refractory anchor brick that requires triple-stacking and separate crating might cost $70 to move and store—but sell for just $68.
In a case study from a Quebec-based industrial ceramics distributor, 14 SKUs flagged for rationalization were responsible for only 1.5% of sales—but required nearly 10% of warehouse labor hours due to special packaging and staging needs.
Step 2: Involve Sales in Substitution Strategy
Salespeople are more open to change when they can still say “yes” to customers. Offer viable substitutions and clear talking points. If you’re retiring a 7.5mm soda-lime glass pane that only one client ordered twice last year, equip the sales rep with:
A 7.0mm or 8.0mm substitute option
Specification sheets showing comparable performance
Price justification for the change
Better yet, align incentives: offer a margin bump or sales bonus for converted SKUs to speed the transition.
Step 3: Set a SKU Sunset Timeline
Don’t pull the plug overnight. Use a 60–90 day communication plan with:
Internal sales alerts
System flags in your ERP
Email and phone outreach to affected clients
Final buy window and MOQ thresholds
This maintains goodwill while clearing out residual stock.
Step 4: Train Sales on Value, Not Volume
Help your team understand that SKU bloat increases errors, slows fulfillment, and eats into the customer experience. The more focused your catalog, the faster the pick, the higher the fill rate, and the smoother the reorders. Those are things clients care about.
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SKU rationalization doesn’t have to create sales disruption—it can drive sales evolution. When approached collaboratively, your sales force becomes an ally, not an obstacle. In a tight-margin industry like glass and ceramics distribution, cleaner catalogs mean faster deals, happier clients, and healthier bottom lines.
