SKU Rationalization
SKU rationalization is the process of reviewing the product catalog and discontinuing SKUs that contribute little revenue or margin relative to their operating cost.
Why it matters for ecommerce brands
Fewer SKUs means simpler forecasting, fewer storage locations, and faster picking.
Common questions
- How do you decide which SKUs to cut?
- Rank SKUs by sales, margin, and inventory investment, then review the bottom performers for strategic value, such as completing a size run or driving traffic. Cut those that add cost and complexity without adding profit or customer value.
Cite this entry
"SKU Rationalization." Fulfillment Lexicon, last reviewed October 16, 2026. https://fulfillment.wiki/glossary/sku-rationalization/