{"id":15675,"date":"2024-06-10T03:15:14","date_gmt":"2024-06-10T10:15:14","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dcl-v3\/?p=15675"},"modified":"2024-06-10T03:15:14","modified_gmt":"2024-06-10T10:15:14","slug":"sku-proliferation","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dcl-v3\/blog\/fulfillment\/sku-proliferation\/","title":{"rendered":"SKU Proliferation in Ecommerce Order Fulfillment and How to Manage It"},"content":{"rendered":"

If your ecommerce product business is looking to grow, one common way brands scale is by adding new items to their product line. This is known as SKU proliferation and it\u2019s a great way to meet customer demand, extend customer loyalty, expand audience, and best of all, increase overall revenue.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

There is a downside to increasing the number of <\/span>SKUs<\/span><\/a> (stock keeping units) to your product line\u2014it can be difficult to manage if your operations aren\u2019t set up properly. Don\u2019t let order accuracy diminish, packing and shipping issues go unchecked\u2014here is more about SKU proliferation and how to manage it successfully.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

What is SKU Proliferation?<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

SKU proliferation is simply the process of adding more products and product variations to the line of goods your ecommerce business sells. It can happen over time, or quickly depending on your business goals, <\/span>seasonality and the market you’re in<\/span><\/a>.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

The key to successfully adding SKUs without running into problems is to first streamline your operations and supply chain to ensure your business can handle the expansion without sacrificing quality or <\/span>customer satisfaction<\/span><\/a>.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

Examples and Causes of SKU Proliferation in Ecommerce Retail<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

SKU proliferation is a great strategy to meet customer demand. Whether you want to reach a new demographic, expand to a new region or country, broaden your product line or boost your ability to bundle products together.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

Here are some common examples of SKU proliferation:\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

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  1. Create add-ons or accessories \u2013 Let your customers customize products with the personal touch of accessories. This is popular with consumer electronics, cars, jewelry, shoes.\u00a0\u00a0\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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    1. Expand color or size options \u2013 Introduce new color varieties to match the season, expand your size options (travel size, family size, plus size, etc). These new SKUs work especially well in apparel, shoes, wearables, beauty, cosmetics, personal care, home goods, toys, and kids’ products.\u00a0\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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      1. Introduce new flavors \u2013 Make it seasonal, limited edition, or round your offering with new flavors. This works for any consumables like food, beverage, supplement, vitamins, wellness products, and more.\u00a0\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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        1. Iterate and launch new features \u2013 To keep customer loyalty many brands rely on releasing products with new features on a regular basis. Especially important for consumer electronics, technology products, or any vertical where improvements are often made to enhance product viability or functionality.\u00a0\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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          1. Offer any variations \u2013 Customers might want a variation of your current product line. This works for any ecommerce vertical, and the catalyst may come from customer demand or supplier\/manufacturer opportunities.\u00a0\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n

            Fulfillment Efficiencies and Automation for SKU Management<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

            The biggest potential hurdles to successful SKU proliferation are overall warehouse management and order fulfillment flow. Without optimizing these first, you\u2019re bound to run into issues and lose customers.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

            Here are a few checks to make before adding any more products.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

            Ensure your warehouse has enough room to store new SKUs. More products require more physical space, it\u2019s that simple. Check to make sure you\u2019ll have enough storage in the short term and long term.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

            Test your tech stack against all possible needs. You\u2019ll need to ensure you can add, track and manage all your new SKUs through your inventory management system, fulfillment software, returns management and ecommerce platforms. You may also need to set specific automation rules for certain SKUs, which will need to be tested before adding them.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

            Prepare your packaging. Adding new products means potentially making new decisions about kitting and packaging. Whether it\u2019s for individual customers (DTC) or retailers, all products and potential product bundles will need packing details to be figured out.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

            Benefits of SKU Proliferation<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

            While there are many ways for ecommerce brands to grow their overall revenue, SKU proliferation is a common way to get there. Certain verticals are better suited to add more SKUs than others.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n