---
title: "Boss, Have You Been Trimming Your Product Line This Year?"
description: "Two months ago, I visited a company where the boss said they had cut 40% of their SKUs over the past few years, and three new star products now account for 60% of sales, with sales growing at over 30% annually for several consecutive years. Such healthy companies are rare nowadays. In previous years, companies rapidly increased SKUs to boost sales. Based on my grassroots research, the top 10 FMCG distributors in each county average about 200 SKUs, with some as high as a thousand. With so many SKUs, it's impossible to load them all for mobile sales, and some are simply forgotten. This confirms what I once said: some products don't sell well because employees forget them."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-07-10"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/ZTniZiVMw_RA7HKpwlmN1Q"
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---

# Boss, Have You Been Trimming Your Product Line This Year?

> Two months ago, I visited a company where the boss said they had cut 40% of their SKUs over the past few years, and three new star products now account for 60% of sales, with sales growing at over 30% annually for several consecutive years. Such healthy companies are rare nowadays. In previous years, companies rapidly increased SKUs to boost sales. Based on my grassroots research, the top 10 FMCG distributors in each county average about 200 SKUs, with some as high as a thousand. With so many SKUs, it's impossible to load them all for mobile sales, and some are simply forgotten. This confirms what I once said: some products don't sell well because employees forget them.

Two months ago, I visited a company where the boss said they had cut 40% of their SKUs over the past few years, and three new star products now account for 60% of sales, with sales growing at over 30% annually for several consecutive years. Such healthy companies are rare nowadays.

In previous years, companies rapidly increased SKUs to boost sales. Based on my grassroots research, the top 10 FMCG distributors in each county average about 200 SKUs, with some as high as a thousand. With so many SKUs, it's impossible to load them all for mobile sales, and some are simply forgotten. This confirms what I once said: some products don't sell well because employees forget them.

With 200 SKUs, it's estimated that more than half are forgotten. With a thousand SKUs, probably no one has ever remembered them all. I've investigated the limit of SKUs employees can remember, and it varies by person, but it's roughly 30-50.

Facing so many SKUs and the pressure of declining sales, what should we do? My answer is to "trim down."

By trimming SKUs, you can increase sales, and high-value-added products have a chance to be promoted.

> **Add in good times, trim in bad times**
> How did so many SKUs come about? It should be said that before 2013, most industries were in a growth period, which I call the upward channel.
>
> When sales are in the upward channel, as long as the channel is open and the brand has some influence, every additional SKU brings some sales. So the original marketing system had the motivation to increase SKUs.
>
> This aligns with the three-step channel strategy I proposed earlier:
>
> Step 1: Single product breakthrough;
>
> Step 2: Product enrichment;
>
> Step 3: Product structure.
>
> Most companies achieved steps one and two, enriching products and increasing SKUs. Few reached step three.
>
> Although I now propose trimming SKUs, I must admit that increasing SKUs was not wrong originally, because the market environment was "favorable." I once said, "In a big fire, there is no wet firewood; in a big flood, there is no sinking sand." This is the effect of riding the trend: even if a product is ordinary, as long as it's with the trend, sales can still be passable.
>
> After 2013, industry sales have been declining, and there's no end in sight. At this point, having a rich SKU portfolio becomes a burden. With so many SKUs, there's no opportunity to promote them all; they are left to survive or die on their own.
>
> Surviving or dying on their own: in favorable times, they "survive"; in adverse times, they "die."
>
> The current environment is "adverse." We must trim SKUs, cutting products with no sales or profit, products that don't move even with promotion, and those that are just chicken ribs.

> **Trimming is to re-add later**
> In 2008, before Uni-President launched its main product, Laotan Sauerkraut Beef Noodles, it did a round of trimming, cutting all the small loss-making SKUs. At that time, Uni-President's sales were not good, and its revenue had fallen to fifth in the industry.
>
> Because Uni-President's Liu Xinhua wanted to push Laotan Sauerkraut, he had to ensure sufficient resources, focus, and rapid breakthrough.
>
> Trimming is often accompanied by immense pressure, because when you trim, you're going against the trend, and sales are already problematic. Cutting SKUs might seem to worsen sales, right? So trimming requires strong mental fortitude, akin to scraping poison from the bone.
>
> Trimming is not the goal; the real goal is to save marketing resources and invest them in a new round of marketing breakthroughs.
>
> Internet folks often talk about "dimensional reduction" and "dimensional elevation," which is the same principle as trimming and adding.
>
> Dimensional reduction is generally for breakthrough. Breakthrough requires either pressure or force. Either use an awl (pressure) or a hammer (force). Because breakthrough requires strength.
>
> Dimensional reduction means increasing pressure, using the awl mindset, focusing, and achieving a single product breakthrough.
>
> Trimming SKUs is not just about cutting them; there must be follow-up actions.
>
> The follow-up is to re-promote new star products, achieving new breakthroughs through heavy promotion. Focus the main marketing force on new star products, and use them to drive sales of other products.
>
> Cut first, then push; trim first, then add. Cut a batch, focus on one or a few. This is dialectics.

> **New star products must adjust structure**
> In the three-step channel strategy, most only achieve single product breakthrough and product enrichment, rarely product structure. Product structure is the best firewall. If it wasn't done well before, when promoting new star products, this lesson must be learned.
>
> A distributor had good sales last year but lost money because all products needed promotions to maintain sales. This year, he changed his approach:
>
> First, vigorously promote high-end new products, with investment and profit;
>
> Second, stop promoting low-end products, let them sell naturally; if high-end new products sell well, low-end will naturally have sales;
>
> Third, mid-range products, under the promotion of high-end products, can increase volume with a little extra promotion.
>
> So this year, both sales and profits are rising.
>
> Although a company may have many products, if there is no leading product, having more is useless. This is the principle of "when one person attains the Tao, even his chickens and dogs ascend to heaven."
>
> What is the leading product now? It must be a product that represents the mainstream shift; "double low" products may have had driving force before, but certainly not now.
>
> With sales declining, many companies put marketing resources into promoting old products, but existing stock cannot be maintained. Instead of preserving the stock, it's better to promote new products, using new product breakthroughs to create incremental sales and value. Once high-value-added new products achieve a breakthrough, more marketing resources will be invested, entering a virtuous cycle.
>
> To move from a vicious cycle to a virtuous one: first, trim SKUs; second, promote high-value-added star products.

-END-

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