Manufacturers and retailers alike often assume that more product options mean more sales. Add a new finish here, an extra size there, and suddenly there’s something for everyone. But more choices don’t always lead to more revenue. In fact, expanding a product line too far can inflate costs, slow down production and confuse customers.
Marketing expert John A. Quelch and strategy consultant David Kenny argue this point in Extend Profits, Not Product Lines, showing how unchecked product proliferation weakens brands and eats into margins. Their findings apply directly to secondary wood manufacturing, where too many SKUs can lead to waste, inefficiencies and declining profitability.
The solution?
A tighter, more strategic product lineup that prioritizes what sells, eliminates what doesn’t and ensures every SKU earns its place.
Here’s how flooring manufacturers can trim the excess and boost their bottom line.
The Hidden Costs of Overextension
One of the primary takeaways from Extend Profits, Not Product Lines is that continuously adding new variations rarely increases total demand within a product category. Customers do not necessarily purchase more flooring simply because there are more options. Indeed, the real costs of proliferation often lurk beneath the surface.
First, complexity in production and logistics increases. For a flooring manufacturer, every new size, finish or design introduces tooling changes, specialized inventory or additional production runs. These adjustments translate into higher labour expenses, more frequent scheduling disruptions and an overall rise in overhead. Small-batch manufacturing also heightens the risk of miscalculating inventory, causing overstocks of unpopular styles or stock-outs of those in higher demand.
Second, brand identity suffers when customers and distributors confront a sprawling, confusing lineup. Quelch and Kenny warn that too many near-identical products may dilute perceived expertise, prompting once-loyal buyers to shop around for more streamlined alternatives. This problem is compounded when retailers or wholesalers lack the space or desire to accommodate every possible variant. Often, these partners prefer dealing with simpler, high-turnover catalogues that offer clarity and consistent availability.
Finally, older or less advanced cost-accounting systems can mask the extent of these complexities. Traditional approaches commonly allocate overhead proportionally to sales rather than capturing the hidden burdens each new SKU imposes on manufacturing, shipping and marketing. Activity-based costing, though more involved, reveals which items are truly profitable and which ones quietly drain resources.
To combat these challenges, Quelch and Kenny suggest a multi-pronged approach that secondary wood manufacturers can readily adapt.
Identify Core Offerings
Begin by singling out top performers — products that generate the bulk of revenue or serve a substantial market need. Whether it’s a best-selling hardwood or an ultra-thin porcelain tile, these ‘hero’ products deserve the majority of your production and marketing attention. Overextension becomes easier to spot once you clearly define which items are essential.
Evaluate Product Viability Regularly
Rather than leaving underperformers on autopilot, set periodic reviews of every SKU. Quelch and Kenny describe how some companies systematically culled low-velocity items to refocus on core moneymakers. By categorizing products into core, niche, seasonal or filler, businesses can identify what to keep, what to scale down and what to retire entirely.
Collaborate with Channel Partners
Open communication with distributors and retailers helps prevent expensive missteps. In-store or showroom pilots allow you to assess actual demand for new lines, limiting the risk that underwhelming SKUs will linger and clutter both your warehouse and customers’ shelves. Channel partnerships thrive when manufacturers can promise consistency, reliability and strong turnover of in-demand items.
Manage Deletions Thoughtfully
Dropping an item outright can alienate its loyal users, so outline a clear transition path. Offer discounts on a higher-performing substitute or maintain a limited direct-order option for certain key accounts. Strategic retirement avoids the inventory headaches and brand backlash that occur when a SKU simply disappears without warning.
Practical Applications
These strategies improve production efficiency, strengthen relationship, create clear brand positioning and innovation where it counts.
Standardizing popular dimensions or finishes reduces frequent machine set-ups. Consistent, repeatable processes boost output quality and cut lead times.
Wholesalers and showrooms appreciate focused product lines that move briskly. If you can help them avoid dead stock, they’re more inclined to spotlight your offerings and maintain a steady pipeline of orders.
Specializing in proven, best-in-class products strengthens a manufacturer’s reputation for expertise and reliability. This focus often resonates more than trying to be everything to everyone.
Trimming low-impact items frees resources for genuine innovation, ultimately adding value rather than clutter.
Tyler Holt is the editor of Wood Industry magazine. He has a master’s degree in literature and publication, and years of experience in the publishing and digital media industry. His main area of study is the effect of digital technologies on industrial and networked production.