How Do I Know Which SKUs Are Hurting My Profit Margins?

I’m selling a lot on Amazon, but I’m not seeing much profit. What’s going on?

If you feel like you’re working harder than ever but your bottom line isn’t moving — you’re not imagining it. Many Amazon sellers experience high revenue growth without a matching profit increase. The likely culprit? A few underperforming SKUs are quietly draining your margins.

And with Q4 approaching, now’s the time to catch those profit leaks before they get worse.

This isn’t about selling more — it’s about selling smarter.

So how do I figure out which SKUs are the problem?

The key is SKU-level visibility — not just what you’re selling, but what you’re actually earning from each sale after:

• Amazon FBA and referral fees
• Advertising costs (especially if you’re scaling PPC)
• Returns, reimbursements, and defective claims
• Monthly storage and long-term holding fees
• Prep costs or additional fulfillment fees

Many sellers rely on top-line dashboards and guesswork. That’s where mistakes (and lost profits) happen. With Seller Labs Profit Genius, you get a full view of your product performance — from SKU-level profitability to catalog visibility and price sensitivity. Tools like SKU Economics, SKU Details, and the SKU Slider work together to help you identify which products are quietly draining your margins — and which ones are ready to scale.

Look for:

• High-revenue products with negative margins
• Break-even SKUs with high ad spend
• SKUs with seasonal demand but year-round storage fees

Can I fix low-margin SKUs, or should I just drop them?

Not all struggling SKUs are dead weight. But they do need attention. Here’s a quick breakdown of common causes and potential fixes:

Issue	Fix
FBA fees are killing profit	Consider bundling or switching to FBM
Ad costs outweigh margin	Pause or retarget ads to high-converting keywords
Excessive returns	Improve product photos, update listing copy, or tweak packaging
Price is too low to cover costs	Increase price based on value proposition or reduce costs

Use Seller Labs Profit Genius to evaluate your SKUs before making any changes. Whether you’re adjusting pricing, ad spend, or inventory levels, tools like SKU Economics, SKU Details, and the SKU Slider help you see exactly how those decisions will impact your bottom line — so you can cut, optimize, or scale with confidence.

How often should I audit my SKUs for profitability?

At least once per month — and definitely before peak periods like Prime Day or Q4.

Use these checkpoints:

• When launching new products
• Before or after large inventory shipments
• After major advertising campaigns
• Following a fee change (especially Amazon fee increases)

Make it a habit to review Profit Genius regularly. The earlier you catch margin leaks, the easier they are to fix — especially when you’re relying on tools like SKU Economics to surface hidden cost issues.

I’ve identified my worst-performing SKUs. What now?

Here’s a 3-step action plan:

1. Tag the SKUs: Organize your catalog into high, medium, and low-profit products.
2. Take action: Adjust ads, raise prices, or offload excess inventory. Focus your time and budget on your winners.
3. Track progress: Monitor your margin growth over the next 2–4 weeks to measure the impact of your changes.

Pro Tip: Before scaling ads, check whether the product is actually profitable. Use SKU Economics to spot low-margin SKUs, then adjust your Ad Genius strategy accordingly — so you’re not unintentionally spending money to lose money.

How can I make this process easier and faster?

Manual spreadsheets, guesswork, and disconnected reports won’t cut it anymore — especially when your margins are on the line. With Seller Labs Profit Genius, you get a clear, unified view of what’s driving — or draining — your profitability.

Here’s how it helps you move faster and make smarter decisions:

• See profit per SKU instantly with automated cost and revenue breakdowns
• Spot margin-killers like high fees, low pricing, or overspend with simple filters
• Review key listing and pricing metrics using tools like SKU Details and the SKU Slider so you can spot patterns, gaps, and opportunities faster.
• Act confidently by backing every cut, scale, or reinvestment decision with real data

No more digging across spreadsheets. No more wondering what’s working. Profit Genius brings it all together — so you can protect your margins and scale what works.

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