10 signs you have too many SKUs

10 signs you have too many SKUs

Does your business need to optimize its SKU portfolio? If you’re having trouble identifying underperforming and cannibal SKUs, carry a lot of inventory to avoid stock-outs at the cost of agility, or are having trouble penetrating the market, it may be time to take a hard look at your SKU assortment.

List of 10 signs you have too many SKUs

Here are 10 signs that you have too many SKUs:

  1. You have product managers for “problem child” SKUs
  2. To avoid stock-outs, you carry a lot of inventory
  3. Fact: 80% of sales come from just 20% of SKUs
  4. You have not yet calculated your carrying cost per SKU
  5. You struggle to measure how new SKUs cannibalize sales
  6. You did not rationalize your SKUs after your last merger (and instead kept all SKUs of both companies)
  7. At your company, an SKU isn’t the most granular level of product identification (e.g. 1 SKU has multiple sizes)
  8. SKU portfolio decisions at your company are driven by minimizing risk rather than maximizing sales & profit
  9. The best-selling SKUs in one territory are not tested in other territories
  10. You have separate SKUs for each channel that your products are sold through

Sound familiar?

At Neal Analytics, we help Retail & Consumer Goods customers identify highly profitable SKUs so they can be distributed further to maximize sales.  Our advanced modeling techniques have been proven to increase sales by as much as 8%!

With our SKU Assortment Optimization solution, businesses can leverage machine learning to gain insights that help dynamically tailor inventory, identify the best products for each market segment, and increase market penetration. This solution is incredibly customizable to the specific KPIs of a business and can scale to handle millions of SKUs. Here’s how one customer used SKU Assortment Optimization to get the right product on the right shelves in over 50,000 stores.

Want to learn more about how Neal Analytics can help you optimize your SKU portfolio?


This blog was originally published 11/1/2016.