The Kill, Keep, or Scale exercise scores every ASIN in your catalog on one number — post-ad contribution margin — and sorts the results into three buckets: Scale (20%+ margin), Keep (10–20%), and Kill (negative). That's the whole framework. The power isn't in the complexity; it's in finally looking.
Because here's what account-level reporting hides: most Amazon catalogs are not a portfolio of products. They're two or three winners dragging a wagon full of passengers, and the wagon is on fire, and the passengers are complaining about the smoke. [Pulls up a chair.] Let's sort out who's pulling and who's riding.
You can run the whole exercise interactively with our free Amazon catalog audit tool — drop in your ASIN metrics and it hands back a ranked verdict per product. This post is the thinking behind the verdicts, so you know what to do with them.
Why Your Catalog Needs a Verdict
Account-level metrics are a democracy where every SKU gets a vote, and the losers vote in a bloc. Total revenue up, blended ACoS acceptable, dashboard green — while underneath, a third of the catalog loses money on every sale and gets subsidized by the products that don't. This is the exact mechanism behind revenue growing while profit falls, and it survives because nobody ever forces a per-product verdict.
The exercise forces one. Every ASIN gets scored, every ASIN gets a bucket, and "we've always sold that one" stops counting as a financial analysis.
A catalog without verdicts isn't a strategy. It's a museum with a payroll.
The One Number That Decides Everything
The score is post-ad contribution margin: what a sale actually contributes after COGS, the referral fee, FBA fulfillment, storage, returns, promotions, and the advertising it took to get the order — divided by net revenue. Not gross margin. Not ACoS in isolation. The number that survives all the fees. (Full formula and a worked example in how to calculate Amazon contribution margin.)
Why this number and not revenue, units, or rank? Because it's the only one that can't lie about whether a product funds the business. A #1 bestseller at −4% contribution margin is a very popular way to lose money. Rank is rented; margin is owned.
The Three Buckets (and the Gray Zone)
Same thresholds our catalog audit tool uses:
| Verdict | Post-ad contribution margin | What it means |
|---|---|---|
| Scale | ≥ 20% | Enough margin to fund advertising, absorb fee increases, and still contribute. These products earn more investment. |
| Keep | 10–20% | Profitable, but below the threshold that funds growth. Worth developing — with a plan, not just patience. |
| Gray zone | 0–10% | One fee change from underwater. Fix the economics on a deadline, or schedule the funeral. |
| Kill | < 0% | Every sale destroys value. Even free fulfillment would leave this negative. Liquidate and reassign the budget. |
One portfolio-level flag on top: if your blended catalog contribution margin sits below 15%, the problem isn't one bad SKU — it's structural, and the fix is usually fees plus ad architecture, not another coupon. That's the point where the exercise stops being housekeeping and starts being the profitability playbook.
How to Run the Exercise in an Afternoon
What to Actually Do With Each Bucket
Scale: these ASINs get the incremental ad budget, the inventory depth, the LTV-adjusted bidding, and the defense of their branded search. Most brands under-invest here because the winners "don't need help." Winners compound — that's the whole point of finding them.
Keep: each one needs a named path to Scale — a fee fix, a price test, a conversion improvement, an ad restructure — with a review date. A Keep without a development plan is just a Kill on a longer timeline.
Kill: liquidate with intent. Clear stock before aged-inventory surcharges outrun the recovery value, harvest any transferable keywords and reviews insight, and move the freed budget and warehouse space to the Scale bucket — the reassignment is where the exercise pays. If Q4 is near, exit inventory rides peak demand out the door; that's the "exit/liquidation" class in the Q4 readiness playbook.
The Excuses Products Make to Avoid the Axe
Every negative-margin SKU has a defense attorney on staff. Here are the closing arguments you'll hear, and how to rule:
The one appeal that legitimately wins: a genuinely fixable cost problem found in step 4. Fix it, re-score it next quarter, and let the number decide. The number is a fairer judge than anyone's attachment — including yours.
How Often to Run It (and Why Pre-Q4 Matters)
Quarterly, plus once before Q4. Fees change, freight moves, CPCs inflate, and a March Keep can be a September Kill without touching anything. The pre-Q4 run matters most: peak season doubles the stakes in both directions — peak fees make weak margins worse, while Q4 demand is the single best liquidation window of the year for the Kill bucket. Going into November without verdicts means funding your losers at the most expensive fees of the year. [Checks the fee calendar. Grimaces knowingly.]
Run it now: the free catalog audit tool takes your ASIN metrics and returns a ranked Kill, Keep, or Scale verdict for every product. And if the tool hands back a wall of Kills — or your portfolio margin blends under 15% — that's a structural problem worth a conversation, which is exactly what the $3,000 Diagnostic exists to untangle. Your winners have been carrying the wagon long enough. Go find out who they are.
FAQ
Kill, Keep, or Scale is a catalog audit exercise where you calculate post-ad contribution margin for every ASIN and sort the catalog into three buckets: Scale (contribution margin of 20% or above — enough margin to fund advertising and still contribute), Keep (10-20% — profitable but not yet funding growth), and Kill (below 0% — every sale destroys value). It replaces gut feel with per-ASIN unit economics.
When its post-ad contribution margin is negative and you cannot fix it with a realistic price, cost, fee, or advertising change. A negative-margin ASIN loses money on every sale, ties up inventory capital, accrues storage and aged-inventory surcharges, and consumes ad budget a winner could use. Liquidate it, and redirect the freed budget and inventory space to your Scale bucket.
Quarterly as a standing exercise, plus once before Q4. Fees change, COGS creeps, CPCs move, and a SKU that scored Keep in March can be a Kill by September. Before peak season the exercise matters most, because Q4 demand is the best liquidation window of the year for exit inventory — and the worst time to be funding losers at peak fees.
After all variable costs including advertising, 20% or above is Scale territory — enough margin to fund growth and absorb fee increases. Ten to 20% is a healthy Keep. Below 10% a product is one fee change away from losing money, and below 0% it already is. If your whole portfolio blends below 15%, the catalog has a structural problem worth diagnosing.
Sometimes a negative-margin ASIN earns its keep as a feeder — an entry price point that introduces customers who then buy higher-margin products. But that is a claim to verify, not assume: check whether its buyers actually cross-purchase using Brand Analytics and your own order data. If the halo is real and measured, reclassify it as a strategic Keep with a budget cap. If it is a story the SKU tells to avoid the axe, kill it.