Most of the work in product profitability is figuring out which of your products are actually making you money.

That’s the hard part.

But once you have the numbers, there’s a second step most owners don’t get to.

What do you actually do with each product now that you know?

The answer isn’t the same for every product.

Knowing your contribution margin is the start. Deciding what to do with it is the work.

The Decision Matrix

Here’s the matrix I use with clients.

Negative Margin: Cut

Products with a negative contribution margin are actively costing you money every time you sell one.

Every unit shipped takes cash out of your pocket. These don’t get optimized, they get cut.

Or you fix the economics fast, which usually means a hard conversation with a supplier or a meaningful price increase.

Either way, the answer is not to keep selling them as they are.

Thin Positive Margin: Hold

Products with thin but positive margins are different.

They’re earning a little, which means they’re not actively hurting you. Keep them for volume if they help your overall scale.

Keep them for brand purposes if they round out a line. But don’t pour ad spend into them.

The math doesn’t support paying to acquire more customers for a product that barely pays for itself.

Strong Margin, Slow Velocity: Prune

Products with strong margins but slow velocity are a quieter problem.

They’re profitable per unit, which makes them feel like winners.

But they’re tying up inventory cash that could be funding faster-moving products.

Sometimes the answer is to keep them but order less, less often.

Sometimes the answer is to discontinue the slow-movers and consolidate inventory cash toward what’s actually moving.

Strong Margin, Strong Velocity: Scale

Products with strong margins and good sales velocity are your sweet spot.

These are where you double down. More ad spend. More inventory. More attention.

The cash you free up by cutting the negative-margin products and the slow-moving ones often goes here.

Cut, Hold, Prune, or Scale

That’s the decision framework. Cut, hold, prune, or scale.

The work isn’t running the calculation once and feeling better about knowing.

It’s reviewing your product mix regularly and making the calls that come out of it.

See Your Full Product Mix at a Glance

In our CFO Focus program, we build a Profitability Map for our clients that gives them this view at a glance.

Which products to stop. Which to scale. Where margin is quietly being destroyed.

It’s a decision-ready view of the same matrix, run on real numbers, updated regularly.

If you’d like to see where your product mix stands today, run the numbers on your products and see what’s working and what’s not.

Then reach out and let’s chat about what your matrix looks like and how to move forward with it.