Retire SKUs and services

Who this is for

Founder led lower-middle market companies with 5 to 50 million in annual revenue that carry long tail items that drain margin and attention.

The quick answer

Score each offer on margin, strategic fit, demand trend, and operational strain. Flag items below target or that block growth of the core. Build an exit plan with dates, substitutions, and account communication. Replace revenue through price and mix rather than volume alone. Track results so the team sees the win.

The method in eight steps

Build the offer inventory
List every SKU or service with revenue, gross margin, unit count, win rate, demand trend, service level promise, and delivery time.
Score on four tests
Target margin, fit to strategy, demand direction, and operational strain such as rework, long lead parts, or rare skills. Colour code red, yellow, green.
Select exit candidates
Pick the reds and the persistent yellows. Protect any items that anchor larger bundles or that are contractual.
Design clean substitutions
For each retired item provide a same or better replacement at a higher margin tier. Write a simple mapping table for reps and service teams.
Write the customer plan
Draft notices by segment. Explain what is changing, why it helps service quality, and the recommended substitution. Offer a reasonable grace period.
Enable sales and delivery
Provide a one page cheat sheet, updated price cards, and a FAQ. Train teams on the substitution script and on how to handle exceptions.
Execute with dates
Publish last order date, last service date, and support window for spares. Remove retired items from quoting tools and the website on the same day.
Measure and share results
Track mix shift, gross margin, cycle time, and customer satisfaction for two quarters. Share the before and after so the team sees the benefit.

Example

A manufacturer retired eight long tail SKUs that required rare parts and frequent rework. They mapped replacements to a higher margin bundle, briefed key accounts, and removed items from the site. Within one quarter gross margin rose by one point and on time delivery improved.

Pitfalls and fixes

Quiet deprecations that surprise customers. Communicate early with substitutions.
Sales pushing exceptions. Give clear rules and escalate only when strategic.
Stranded inventory. Plan down buys and use parts for service spares.

Checklist

Offer inventory with scores
Exit list and substitution map
Customer notices and grace periods
Tools and site updated on the same date
Post exit metrics and review schedule