The SKU Problem That’s Killing Your Profit (And How to Fix It Fast)

If your product line keeps growing, but your profit, your team, and your marketing all feel heavier than they should, you may not have a sales problem. My friends, you may have a SKU problem, and that's what we're getting into today. Welcome back to the Product Boss Podcast. I'm Jacqueline Snyder, and on this show, we help established product-based business owners grow towards and beyond $1 million with stronger systems, better decisions, and a business that doesn't rely on them for every single thing. So if you have real traction, real customers, and real products that are already selling, but you also know your business feels heavier than it should, then you are absolutely in the right place. Today we're talking all about the SKU problem nobody talks about at 6 and 7 figures. Because once a product-based business starts growing, there is an assumption that more products must mean more opportunities. Like, stop for a second, ask yourself that. Do you think that, well, okay, like if I just make more, I'll sell more, and that's what's going to break through and level my company up? But here's the deal, more products means more ways to sell, more products means more ways to attract customers, More products means more revenue. And listen, on the surface, I get it, that can feel super true, right? That might be the thoughts that you're having. But sometimes adding those products does create more sales, sure. Sometimes it does open up more opportunity, great. But what no one talks about enough is that more products can also create lower margins, okay, hello, losing money, diluted marketing, what do I even talk about, message about, what am I pointing people towards, and more drag to your operations, just a heavier business to carry. And by the way, because you know we love to add chaos and complexity to our businesses, more complexity for you and your team than you realize. So if you're a solopreneur, hello, hi, all the hats you're wearing. And if you have team members, the team members that you get to have, create more opportunities for, or even have to hire for, right? So all of this starts to kind of feel heavy. So if you're sitting in that place right now where your business is making money but it also feels cluttered and messy or harder to manage than it should, then this episode is going to hit home because Truthfully, here's the truth, right? Some businesses do not have a sales problem. They just have too many SKUs, too many products, too many variations. And if you don't identify that now, then you're just gonna keep trying to solve by adding even more. And we know how that feels. So you're gonna think that the answer is that, but this is what I want to talk about, right? You're gonna think the new size, the new bundle, the new idea. Gosh, we have so many ideas. Yes, yes. But this is what people don't talk about. By the time you're at 6 figures, multi-6 figures, 7 figures, and you're growing towards that, the conversation has to change. It's no longer asking, what else can I make? It's about making what is actually worth carrying, bringing to market, marketing, and holding it all, right? Because that's a different question. And mature business owners ask different questions. Not just should we market it, but should we keep tying up cash in it, right? Cash. Should we keep training the team on it? Or really, maybe asking yourself, should we keep giving it shelf space, website space, content space, and mental space? Because every SKU has a cost beyond what the cost is to produce it. It costs attention, it costs inventory dollars, it costs storage, fulfillment time, communication, decision-making. Oh my gosh, all the decisions and marketing. So if you have too many of those, your business is going to feel like it's running in 10 directions at once. So let's start here. Let's first start with why businesses end up with too many SKUs in the first place. So usually it doesn't happen because someone sat down and said, "You know what I would love to do? I'd like to make my business more confusing and less profitable." Right? You guys, you did not sit down and be like, "You know what I want?" It happens because growth rewards experimentation in the beginning. Right? You launch a product and it sells, so you make another version. And customers ask for another scent, So you add it, or one color does well, so you add 4, or at market a customer asks for a smaller size or a bigger size, so you bring the smaller or bigger size. Maybe a wholesale account wants a variation, so you make it for them too, and you're not even asking for minimums. And little by little, your catalog's gonna expand, and expansion's gonna feel like momentum, and it's gonna feel like it's growing, and you're giving more people choices, and you feel like you're becoming more established, but then you You woke up one day and realized you're carrying way more than you can actually support well. That's when the SKU problem starts. And one of the first places it shows up is in your margins. Yeah, this is why I work with million-dollar businesses. I just had a million-dollar company join the Collective, right? The Product Boss Collective. It's our program that's like fricking a game changer in the world of product-based businesses. But when I hopped on a call with her, She was making $1 million, she had 10% profit, and was not paying herself. And that's because of this, right? You're starting to see it in your margins. And so this is where a lot of people get it wrong. They look at sales and they think, well, people are buying it, so it must be worth keeping. But that's not true, right? Because it has all that burden and it ties up your cash and it requires a lot of labor. And the other side of this is a product can still sell and still be annoying to produce. It could be hard to restock. It could be easily damaged in shipping, expensive to ship, hard to explain, or even just too low of a margin to justify the effort, even if you're selling a lot of them, even if you're selling a lot of them. So this is where businesses can quietly get themselves into trouble because yes, the top line could look totally normal, but the bottom line is getting squeezed. And the bottom line, the profitability, that's what we create. Right? That's what I work on with all of you. Like, I don't care how big your business is, is it profitable? And can you carry it? And can you support the life-first life that you want to create and the team to support you in doing that? So I know that it's going to feel like you're growing, but your margins might be telling you a different story. So take a look at that. So the next place that SKU problem shows up, like, in problems is marketing. This is one that I think a lot of product-based business owners feel every single day, even if they do not realize it's connected to their product line. So if you have too many products, it's going to be harder and harder to market clearly because now you're trying to talk about too many things, right? This week you're pushing one thing, next week another. You're trying to mention a bundle and a seasonal and the bestseller, right? Something new. Oh, overwhelming. I mean, are you feeling it in your chest? Because I'm feeling it in my chest, like the weight and the overwhelm. And we get to get out of overwhelm. Something that's not selling enough. Is there something there that you feel like you're giving a lot of attention to? Do you ever go to the things that don't, that aren't working really well, so you give that the attention versus the thing that is working really well? Do you ever go like, no, I'm gonna go to the problem child versus the one that's like, no, no, no, let's go do that? Because when you start to confuse what you're offering, your marketing is going to lose concentration and your customer's not gonna know what you're selling, what you're known for, right? What your hero product is. Like, that's your leader. We gotta lead with that in front. We want your customer to know what the leader, what the hero product is, what the core collection is, what to buy first, right? What's the thing that people come back for and what solves the clearest problem, right? They just might see a lot and feel overwhelmed. It's like if you ever go to Ross or like Marshalls or one of those big box stores that have like all the product crammed in, like all the hangers of all the shirts, and you have to like dig through it to find the one shirt. That's how your customers are going to feel, and it's actually not going to support you. It's going to create chaos and it's going to cause hesitation. And if you're wondering why your products are awesome but you have weak conversion, it's not because the product's wrong. It's that it's just noise. It's noise and chaos. And we do not need more of that as customers, right? You just haven't made it easy for your customer to know what matters most, what they need to get right now in this moment, why it makes sense. It just dilutes everything. Instead of building momentum. So a healthy business, my students, this is what we talk about inside of my programs, especially the Collective, is that not everything should get equal treatment and equal attention, right? What's the thing that can lead? When you stop pretending that every SKU deserves equal attention, or let's say the SKUs that aren't even doing that well, you're like, no, no, no, let me just talk about that one more. It's just not true. It's not true, right? They're different. They have different reasons. Some are profit drivers, some attract new customers, some are for retention or repeat purchases, some are legacy products, but they're just not all the same thing. So the ones, the businesses that I'm working with that get to their multi-six, seven-figure businesses, they have a hierarchy to their products. They know what leads, they know what supports, they know what they get rid of and retire, they know what they get to simplify. Right? So now let's jump into operational drag, like the thing that's really weighing you down, which is the operations, 'cause that's where like it feels unstable and feels heavy. So every additional SKU is going to create more moving parts, right? More inventory to track, more raw goods, more inventory to forecast, more packaging to managing, more labels, more bins, more counts, more replenishment. You guys, Wow. Right? More expectations. It's just, it's a lot. So every time you add more without simplifying anything, your business will get harder to run. It's not better, it gets harder. This is what I see happen when people are just misdiagnosing this. They're just making all the things, right? They might say, I need a bigger team. Okay, maybe. Or they might say, I need better systems. Probably 100%, but also they may also say, I need to be more organized. Yeah. Sure, great, yes, all of it. But sometimes the very first place we look is, are you carrying too many products for the stage of business that you're in? Because yes, we can systematize complexity. That's legit what we do every single month. This means that the thing is, is that your complexity, not all of it needs to be systematized, right? We gotta distinguish, and this is like the difference between being the doer of everything and becoming the boss of your business. Right? We don't need to manage mess better. We just need less mess. Right? Sometimes I'm to my kids, I'm like, let's just throw it all away. We don't need any of this crap. So we have nothing that we have to put away. This really matters when your business still heavily relies on you and you have a very small team to manage it. And the more team you have, you also know that team is, is a lot to manage. There's a lot of moving parts. So do you need to give them more to manage? Or how can you simplify? Because the goal here is that we got to get everything that's happening in your head out of your head and creating more opportunities so that your business is not still reliant on you, so that we get to step into more owner independence versus dependence. And this is one of the fastest ways that I see people get stuck, but one of the easiest ways to get unstuck and to get more profitable. And so if this resonates with you, okay, if this resonates with you, message me over at The Product Boss on Instagram. Let me know like where you, where you feel like the SKUs are heavy, where you feel like marketing feels hard, where operations feels heavy. I want to know, because I get to create these podcasts based on all of the feedback I get and all of the conversations that we get to have together. And so I want to know because what we get to do to grow your stronger business is get you more profitable, get you more focused, get you more supported, how to have less chaos and have the business less dependent on you, right? Less dependent on you. So if you know that this is the work your business needs right now, and if you know you're not dealing with a motivation problem, but a decision problem, a systems problem, a complexity problem, that's exactly the kind of work we do here at The Product Boss. Right? So thank you for subscribing to this show. Follow us over on Instagram, join our mailing list. And if you're like, no, no, Jacqueline, wait, I want to go a little bit deeper, then I've got the Collective. And if you're curious about how the Collective can support you, and if this, any of this sounds like you, then just go to theproductboss.com/bookacall, theproductboss.com/bookacall, and book a call with our team. It could be me. It could be someone else on my team, and that's where we're gonna talk about where you are, what's making your growth feel heavy, then what's the next right step for you and how The Product Boss and myself and my team and a board of advisors can support you. Okay? So that's theproductboss.com/bookacall. I'll drop the link. And so if this episode really gave you a real shift today, then send it to another product-based business owner that might have more complexity than they realize, because sometimes The smartest growth move is not adding more, it's getting clearer about what is actually worth carrying. All right, I'll see you next time.