If you’re not sure where to begin trimming your product catalog, start at the bottom—and start now.
Rationalizing your product catalog can feel overwhelming, especially when hundreds or even thousands of SKUs have been layered on over years of serving various customer needs. But for distributors in the glass, ceramics, and refractories sectors, waiting is costly. Dead stock ties up working capital, bloats warehouse operations, and obscures data visibility.
The good news? You don’t need to cut half your catalog overnight. Just start with the bottom 10%.
Why 10%?
The bottom 10% of your SKU list, when ranked by sales velocity or margin contribution, usually includes:
Obsolete items no longer supported by suppliers
SKUs purchased for a single one-off client job
Niche or duplicate items with low differentiation
This slice of your catalog often:
Represents <1% of your revenue
Consumes 10–15% of your storage footprint
Creates confusion for sales teams and customers
Step 1: Pull the Right Data
Pull a 24-month sales history with the following fields:
SKU ID
Quantity sold
Revenue
Gross margin %
Number of unique customers
Last order date
Inventory on hand
Sort the list by revenue, ascending. Cross-reference with order frequency. Look for SKUs with <3 orders/year and zero sales in the last 12 months.
Step 2: Assign Risk Levels
Before cutting, evaluate:
Strategic customer reliance (if any)
Vendor exclusivity or penalties
Potential to convert to made-to-order
Label each candidate SKU with a risk flag: low, medium, or high. Prioritize trimming low-risk items first. Communicate with affected customers if needed—offering alternates or longer lead-time options for custom requests.
Step 3: Phase Out Intelligently
Use a structured phase-out process:
Freeze reorders
Mark items as inactive in ERP
Notify sales and procurement
Offer final clearance pricing if appropriate
Track warehouse space reclaimed, inventory value liquidated, and carrying cost reductions. Use these wins to justify deeper rationalization rounds.
Step 4: Reinvest the Gains
With space and capital freed, double down on SKUs that:
Have healthy margins and fast turns
Support project-based growth (like refractories for shutdowns)
Offer bundling potential with higher-ticket items
For example, if you eliminate five slow-moving types of kiln tiles, reinvest in better-stocking your best-selling ceramic fiber boards, where availability directly translates to order wins.
:
The path to a leaner, more profitable catalog doesn’t start with sweeping changes—it starts with slicing the bottom 10%. It’s manageable, measurable, and repeatable. For glass, ceramics, and refractories distributors, catalog trimming isn’t a cost-cutting measure—it’s a strategic enabler. Every SKU you retire smartly is a step toward tighter operations, better margins, and clearer focus.
