by Steve Choate, business development manager, for the Resolutions blog series

Adding new items or extending a product line seems like the best way to build your business and increase your brand awareness. However, sometimes less is more!

Adding items can oftentimes dilute individual SKU sales, and make shopping the shelf for the consumer more confusing as well as managing your own inventory levels more difficult.

Before adding items, you should first review your current product offering to make sure that they all are meeting the individual goals you set. Look at the distribution each item has achieved to date, looking not only at the total cases sold, but also the number of doors that each product is being sold into. If you want greater item reach, think about eliminating the item with the highest case sales.

Next, you need to review the various sizes and flavors that you have of each SKU. What are the sales and profit contribution from each? Will customers switch to a different size or flavor if you eliminate one? Would customers buy another manufacturer’s item if you did not have the same variety? If you will not lose a sale, consider eliminating the poorer performer(s) and focus your energies on the ones that remain.

Do the retail price points of your products fit the class of trade? Can you eliminate a price point and pick up more overall sales due to a better retail price? If yes, then you should keep the more appropriately priced item and discontinue the other.

Does each of your products fill a unique consumer need and help attract customers to your retailer partner? If you have multiple items filling the same need, you may want to consider eliminating the duplication. This will help improve the customer’s shopping experience as well as your inventory levels.

With all of the changes happening in retail, does your product still represent your company’s current and future direction? If you are shifting your direction or priorities, you should look at discontinuing those items that you feel do not or will not fit your future direction. Getting rid of them now may be easier and more profitable than waiting until the market disappears and you have to try to get rid of them via a “fire-sale.”

Along the same line, where is your item in its product life cycle? Is it still on the upswing or is it past its prime?  Taking action now will free up capital that you will be able to redirect to new items with growth potential.

Whether adding or eliminating SKUs, you need to look at how those items fit your present and future goals as well as the needs of your customers.