The SKU Role Framework: Why Every Product in Your Catalogue Has a Job

Stop Treating Every Product the Same

Most ecommerce brands run Google Ads as if every product in their catalogue deserves equal attention. They don't. A £15 impulse buy and a £500 considered purchase require fundamentally different advertising strategies.

The Four SKU Roles

The SKU Role Framework assigns every product in your catalogue one of four commercial roles:

1. Scale SKUs

Products with healthy margins AND proven demand. These are your growth engine.

• Characteristics: >40% margin, consistent conversion history, scalable search volume
• Strategy: Maximise impression share, aggressive bidding, priority budget allocation
• Goal: Drive as much profitable volume as possible

2. Profit SKUs

High-margin products with moderate or niche demand. These are your margin protectors.

• Characteristics: >50% margin, lower volume, often specialist or premium items
• Strategy: Maintain visibility without overpaying, tROAS targets that protect margin
• Goal: Contribute outsized profit relative to spend

3. Recovery SKUs

Products past their prime — aged stock, end-of-line, or seasonal leftovers.

• Characteristics: Declining demand, potential dead stock, cash tied up in inventory
• Strategy: Progressive markdown campaigns, time-bound recovery windows, cash-first bidding
• Goal: Convert stock to cash before write-off

4. Gateway SKUs

Low-margin or loss-leader products that drive customer acquisition.

• Characteristics: Low margin, high volume, strong repeat purchase potential
• Strategy: LTV-aware bidding, controlled spend with clear CAC limits
• Goal: Acquire customers profitably when measured over lifetime value

Why This Matters

Without SKU roles, your Google Ads budget flows to wherever Google thinks revenue is easiest to find. That is usually your highest-volume, lowest-margin products — the exact opposite of what your P&L needs.

A £10k/month budget without SKU roles is a £10k/month donation to Google's revenue targets.

Implementation Steps

1. Export your full catalogue with margin data, stock levels, and sales velocity
2. Score each SKU on margin, volume, and strategic importance
3. Assign roles using the framework criteria
4. Create custom labels in your product feed for each role
5. Restructure campaigns — one campaign per role with role-specific targets
6. Review quarterly — roles change as inventory and demand shift

The Working Capital Connection

SKU roles are not just about advertising efficiency. They are about working capital management. Recovery SKUs represent cash locked in inventory. Gateway SKUs represent customer acquisition investment. Scale SKUs represent your growth runway.

When your CFO asks "what are we getting for our ad spend?", SKU roles give you an answer that maps directly to the balance sheet.