Deciding which products to discontinue, and what you would lose
The short answer
To decide which products to discontinue, start with lines that earn low margin and have few unique buyers, then check the customers behind them. Estimate how much of each line's sales would transfer to similar products and how much spend would leave with customers who rely on it. Discontinue the lines where little would leave.
Why it matters
Discontinuing on sales or margin alone can cut products your best customers build their baskets around. Seeing the customer impact first separates lines you can drop cleanly from those that would cost far more than their own sales.
The question to ask
Copy this into Lexi as written.
What the answer looks like
Illustrative output on sample data
Illustrative example: how Lexi answers this for a home improvement retailer. It estimates what each candidate line would cost to discontinue, including other spend at risk from its buyers.
- Specialty wood stain: $48,000 sales, buyers spend $1,900 a year. Estimated loss $138,000.
- Basic paint tray kit: $36,000 sales, 85% would transfer. Estimated loss $5,400.
- Novelty doormats: $22,000 sales, 60% would transfer. Estimated loss $8,800.
What the data shows
The paint trays and doormats can go with little lost.
What it means
The wood stain looks weakest on its own, but its 600 buyers are high-value contractors with no close substitute.
What to do
Discontinue the trays and doormats and keep the stain.
Transfer rates are estimated from past substitutions. Want me to run this on the next ten candidates?
Frequently asked questions
How do you decide which products to discontinue?
Combine product and customer views. Shortlist lines with low margin and few buyers, then check who buys them and what else those customers buy. Discontinue lines with close substitutes and no high-value dependents, and keep or fix lines that anchor valuable customers' baskets.
Why can a weak line be worth keeping?
A line can be weak on its own and still be the reason a valuable customer shops with you. If its buyers spend heavily elsewhere in the range and have no substitute, cutting it can send their whole basket to a competitor. The customer check catches these anchors.
How do I estimate sales transfer after a product is discontinued?
Look at what happened to sales of similar lines when past products were cut or went out of stock. Where close substitutes exist, most sales usually move across. Where none exist, assume little transfers, and check customer purchase histories for evidence of switching between the lines.