Maximizing Profitability from Your Top-Selling SKUs
Maximizing Profitability from Your Top-Selling SKUs
Maximizing Profitability from Your Top-Selling SKUs
By Alan Miklofsky – September 6, 2025
Independent shoe retailers rely heavily on their top-selling SKUs. These are the products that generate buzz, bring shoppers through the door, and often account for a disproportionate share of revenue. But there’s a catch: bestsellers are not automatically the most profitable items in your store. In fact, without careful management, they can become margin eroders, especially if markdowns get out of control or vendor terms aren’t optimized.
The real challenge is this: how do you make top-selling SKUs not only high-volume revenue drivers but also high-margin profit centers? The answer lies in three disciplines—building a following through advertising, maximizing margins through smarter buying, and controlling markdowns with discipline.
Building a Following Through Advertising
Top sellers don’t sell themselves. Even when a product is a hot commodity nationally, your local customers need reminders that your store is the best source. Creating a following around these items strengthens your identity as the go-to retailer for must-have shoes.
Digital Channels. Use social media, targeted Google or Facebook ads, and email newsletters to highlight your best sellers. Posting customer testimonials or staff favorites humanizes the product and positions it as worth every penny at full price. A video clip of a staff member explaining why the shoe is a favorite can be more effective than a static product photo.
Traditional Direct Mail. Don’t overlook the power of print. A well-timed postcard campaign can reinforce your message and reach customers who might scroll past a digital ad. Unlike an email that disappears in seconds, a catalog or flyer often sits on a counter or refrigerator, serving as a physical reminder until the shopper acts. Bestsellers featured in these campaigns gain credibility, and customers often walk in with the mailer in hand asking for “the shoe in the ad.”
Co-op Leverage. Many vendors provide co-op advertising dollars. These should be directed toward spotlighting your top sellers, as they’re often the products vendors are eager to push as well. Use vendor graphics when they fit your brand, but don’t be afraid to localize the message to emphasize your service, your staff, and your store identity.
Consistency Matters. The goal is not a one-off campaign but ongoing reinforcement. When customers associate your store with a specific shoe, they’re more likely to return season after season and tell their friends where to find it.
Maximizing Margins Through Smart Buying
Selling more pairs is important, but profitability hinges on margins. Without intentional buying and pricing practices, top sellers can easily slip into margin mediocrity.
Vendor Negotiations. Strong SKUs give you leverage. Use that strength to secure better dating, co-op, or early-order discounts. The vendor benefits from moving volume, and you benefit from added profitability.
Commit Deep, But Smart. If a SKU has proven itself across multiple seasons, buying deeper can lower your per-unit cost. But tie deeper commitments to negotiated protections—like return privileges or promotional allowances—so you aren’t stuck with excess inventory if demand shifts.
Case Example: Clarks Sunbeat. One women’s sandal illustrates the power of buying with confidence. For over 15 years, I purchased hundreds of pairs annually (at one point exceeding 1,500 pairs for the season), selling it year-round with little fear of excess. By pre-booking each season based on the previous year’s sales, I locked in discounts and strengthened my margins. Even when markdowns were required, they were a tiny fraction of total sales because the style was promoted aggressively and kept fresh in customers’ minds. This shows how deep commitments, when guided by historical performance and supported by advertising, can pay off consistently.
Case Example: Ecco Yucatan. Another example is the Ecco Yucatan, an outdoor sandal that became a mainstay in many stores for years. Its consistent demand made it a reliable profit center, provided that retailers pre-booked smartly and maintained inventory across seasons. Because the style rarely went out of fashion, markdowns were minimal.
Price Integrity. Many of the strongest-selling shoes are under MAP pricing guidelines. This is a built-in protection, but it only works if you hold the line. Resist the temptation to discount early, and instead, emphasize the value proposition: comfort, durability, and service. Remember, the customers who shop you for top sellers are often less price-sensitive—they want the right product, in the right size, from a trusted source.
Add-On Selling. Profitability can also be enhanced by attaching accessory sales. A top-selling shoe paired with socks, orthotics, or handbags raises the average transaction size and protects your gross margin percentage. Staff training plays a key role here.
Controlling Markdowns with Discipline
Markdowns are the silent killer of profit. While top sellers generate high volume, they can also create large losses if overbought or poorly managed.
Measure Sell-Through Weekly. Top SKUs can look healthy one week and show signs of slowing the next. Weekly monitoring helps you spot trends before they become problems. If velocity slows, stop reorders immediately.
Manage Sizes Carefully. Bestsellers almost always sell unevenly by size. Core sizes disappear fast, while fringe sizes linger. You should understand your size curve and when to fill in the gut sizes and on which sizes to reduce your fills (at the appropriate time in the season).
Targeted Promotions. Not all markdowns need to be publicized broadly. Use customer lists or segmented promotions to quietly move lingering inventory. A personalized email to customers who previously bought similar shoes can clear odd sizes without reducing perceived value in the store.
Exit Strategy. Sometimes a SKU loses steam and must be cleared. Have a plan for final markdowns, whether through clearance tables, tent sales, or online outlets. The key is to exit quickly and cleanly to free up cash and floor space for the next winner.
Balancing Volume and Profitability
The heart of managing top sellers is balance. You want to maximize volume without undermining profitability. This requires treating bestsellers not as automatic wins but as strategic profit drivers.
Advertising builds excitement and brand identity around your store.
Smart buying ensures every unit sold contributes fully to gross margin.
Disciplined markdowns prevent overbuying from turning into financial losses.
Together, these elements create a flywheel: demand drives volume, volume fuels margin opportunities, and controlled markdowns protect profitability.
Key Lessons for Retailers
Don’t Assume Bestsellers Are Automatically Profitable. Without margin and markdown control, volume can hide weak profitability.
Invest in Visibility. Advertising—both digital and traditional direct mail—reinforces your store as the source for hot items.
Use Vendor Partnerships Wisely. Negotiated terms and co-op funds are your margin boosters.
Watch the Numbers Relentlessly. Weekly sell-through and size analysis prevent markdown surprises.
Think Beyond the SKU. Attach add-on sales to top sellers to raise transaction value and strengthen customer relationships.
Leverage History. Proven winners like Clarks Sunbeat and Ecco Yucatan demonstrate that long-term consistency, pre-booking, and careful promotion can turn one SKU into a dependable profit center for over a decade.
Conclusion
Top-selling SKUs are powerful tools in a shoe retailer’s business, but only when managed with intention. Building a following through advertising, maximizing margins through smart buying, and controlling markdowns with discipline transforms these products from mere traffic drivers into reliable profit engines.
Independent shoe retailers who master this balancing act don’t just sell more shoes—they build healthier businesses. The bestsellers keep the cash registers ringing, while the strategies behind them ensure those rings echo all the way to the bottom line.