Managing Risks of Limited Amazon SKUs

I'll be honest: Last month, I raised my voice at our account manager. But, when she showed me the client results, I was shocked. I had questioned why Anahita had cut Jason's Amazon catalog from 87 products down to just 20 core SKUs without consulting me first. "That's a radical move! You can't just delete 67 listings without approval," I said, voice rising in the team meeting. 3 weeks later, she came back with data showing Jason's sales had INCREASED by 32%. So, I admitted, "That's incredible! How?" and she immediately responded, "Nitin, his $24,000 PPC budget was spread too thin. By focusing on just our best 20 SKUs, he now spends $15,000 and makes more sales." Ouch. Point taken. Fewer products ≠ less revenue. But still - I needed to apologize to the team for doubting Anahita’s strategy. So, in the end, I acknowledged my mistake, and we celebrated the win. I guess that's what a real team is supposed to do. Challenge assumptions, trust expertise, learn and improve. By the way, we discovered these 3 critical insights about SKU optimization from Jason's account: ☐ 80% of profits came from just 23% of products ☐ Ad spend on low-converting products was cannibalizing top performers ☐ Inventory capital tied up in slow-moving SKUs prevented scaling winners If you're ready to join the sellers who understand that focus beats variety in the Amazon game, here's what I recommend: 1. Pull your last 90 days of sales data 2. Rank products by both total revenue AND contribution margin 3. Identify which SKUs in the bottom 50% are stealing ad budget from your winners PS: Don't get caught in the "more is better" trap. The most successful Amazon sellers I work with all discover the same truth: precision beats volume every time. #amazonseller #ppcoptimization #skumanagement #ecommercestrategy #sellerinventory

Why Amazon Can Turn Off Your Best Seller Overnight Strong sales don’t always mean safety. Low-margin, high-handling SKUs are now being flagged internally by Amazon. That means slower delivery, weaker search placement, and tighter restock limits. No alerts. No dashboard warnings. Just declining performance. At Extreme Branding, we spotted this pattern across 47 SKUs generating six-figure sales annually. What we learned (and how we fixed it): 1️⃣ Amazon tracks SKU-level profitability. It’s not just about your sales. If Amazon’s costs outweigh their margin, the SKU is deprioritized. 2️⃣ Catalog audits are essential. We built an internal system that measures contribution margin the way Amazon does, not the way sellers usually calculate profit. 3️⃣ Hybrid fulfillment keeps momentum. Pulling flagged SKUs into FBM or 3PL stopped ranking erosion while protecting account health. 4️⃣ SKU mix matters. We restructured catalogs to highlight SKUs that Amazon wants to push, high-margin, low-handling items that strengthen the account as a whole. This is the operational side of scaling most sellers miss. Because on Amazon, it’s not enough to sell well. You have to align with what Amazon finds profitable. P.S. A SKU profitability audit can reveal which of your products are at risk long before sales drop. DM me if you’d like to run through the process. #AmazonFBA #AmazonPPC #BrandScaling #AmazonSellers #EcommerceGrowth #MarketplaceStrategy

SKU Rationalize aka sku rat: “Review each sku (style-color-size) in your assortment and determine based on sales, profitability and strategy if you should keep or let it go” It sounds simple. Numbers don’t lie but we try to defend things we love or feel we need. Removing emotion is step one. The Reebok Princess in 1999 was the ultimate loss leader. I had to have it in my assortment - it was the Princess! BUT we were losing $1 every time we sold a pair. If you cannot negotiate or create a strategy to be profitable - time to let it go. Selection is important for retailers and is one of Amazon’s top KPIs .   Just because Amazon wants full selection does not mean brands have to give it them.   Managing selection is essential to a profitable business. Having too large of a selection puts a strain on resources and margin. Focusing resources on the items driving 80% of your business yields higher profit. Such as: ·      Time ·      Content and asset creation ·      Maintaining catalog and PDPs ·      Building, shipping, holding inventory ·      Advertising costs ·      Promotional spend To name a few…   How many items can you maintain at a high level and be profitable? Which styles are draining your resources and bottom line? If you are not sure, you are overdue for a sku rat.   Here are the steps I recommend:   1.    Remove emotion. Review the data.   2.    Align on brand strategy. Who is the target customer? What is the pricing model? What is the margin goal?   3.    Review the 80/20 - what is the 20% of styles that are driving 80% of the business?   4.    Review profitability at the sku level – are you making money? If not, why and can you fix that? If not - let it go.   5.    Of that 80/20 are there any emerging styles that are aligned with the strategy? Are there any in the top 80% that are declining and will fall out of the top based on current trend?   6.    What new items are coming into the assortment and where do they fit into overall assortment and strategy?   7.    Repeat process ideally monthly but at minimum quarterly to stay ahead of buying cycle. How often do you review your assortment/catalog? What steps would you add? #retail #amazon #amazonfba