Boost Profits by Eliminating Products
Many product-oriented businesses have grown by introducing new offerings. Over time their product lines grow long. Some items sell a lot while sales of others dwindle but the product is still available for purchase. It may sound counter-intuitive, but trimming your product line you can increase your profitability.
You have cash tied up in inventory can be used for something else in the business that is more profitable or urgent
The product gets too close to its shelf life and either cannot be sold or must be sold at a significant discount
It takes up shelf space that can be used for more profitable or better-selling products
You spend valuable time sourcing and managing the slow-moving products
You are overwhelming your customer with choices; they get confused and do not buy anything (read https://www.apa.org/monitor/jun04/toomany from the American Physiological Organization for more info on this consumer behavior).
How to fix it?
Look at the gross margin percentage for each item. Which ones are the lowest? Also look at the total revenue for each item. Which have the lowest sales? Next, are there any items that have logistical, supplier or other issues?
There may be a good reason to keep a product around. But most likely there are items that stand out for removal. Decide which products to eliminate and create a plan to get it done. In your plan make sure you consider how the customer will react and if you can shift them to a different product.
Best of luck and please reach out if you have questions!