Hero Product: Time to Hedge?

How much of your revenue rests on one SKU, and what does that say about your strategy?

There are really two broad ecommerce models to separate before we talk concentration: brands that sell what they make, and retailers that sell what others make. Think Solo Stove or HexClad on one side, Dick’s Sporting Goods or Backcountry on the other. The risk profile, the margin levers, and the acceptable level of product concentration look very different depending on which camp you are in.

I’m working with a high SKU count reseller. One product accounts for roughly 25 percent of total revenue. Thousands of SKUs live on the site, yet a single item is carrying a quarter of the revenue. That is workable, but it is also a structural risk. If the supplier cant supply, if pricing pressure shows up, if Google or Meta quietly shift the auction in a way that impacts this exact item, the business will suffer.

How a product becomes the hero (and stays there)

Most “hero dominance” stories fall into a handful of patterns:

• Launched-first momentum: the item was first, so it kept the head start in reviews, backlinks, and creative assets.
• Viral spike: TikTok, Reddit, a BuzzFeed list, an Amazon roundup. The wave never fully died.
• Entry-price anchor: cheapest SKU becomes the default trial purchase.
• Universal appeal: no sizing, no compatibility friction, easy gift.
• Operational ease: always in stock, ships cheap, tons of reviews, clean PDP.
• Algo favoritism: Meta, Shopping, or TikTok keep finding cheap conversions, so the loop reinforces itself.

None of that is inherently bad. It just explains how brands got here. The problem is relying on one pillar and never building a second or third.

Owned brand vs reseller: different baselines, different ceilings

If you manufacture or private label, early concentration can be rational. Year one and year two where 60 to 90 percent of revenue comes from the flagship SKU is fine. The question is whether that share compresses as you add variants, bundles, and new lines. If three years in, one SKU still controls 70 percent, you are a product company with a website, not a brand with a portfolio.

If you are a reseller or marketplace, the logic flips. Your edge is selection, merchandising, and buying power. Seeing any single SKU above 20 percent suggests over-reliance on one supplier or one algorithm. Revenue is partially outsourced to someone else’s stability and Google’s mood swings.

What “healthy” looks like in practice

These are reference points to stress test against your own margin structure and growth stage:

Strategic moves if you are over-exposed

You do not fix concentration by hoping the hero keeps printing. You fix it by shifting demand while you still control the levers.

1. Replicate the angle, not the SKU. Figure out why buyers latch on (price, problem solved, social proof, giftability) and launch or feature a few SKUs that scratch the same itch.
2. Bundle the hero with something else. Make it the anchor and let other SKUs hitch a ride so revenue share shifts.
3. Price test the leader. If demand holds, skim a bit more margin and fund awareness for non-hero products.
4. Rebalance merchandising. Stop giving the hero every top slot: homepage hero, nav, first email block. Rotate.
5. Run a controlled blackout test. Pull back spend for a few days and see what fills the vacuum. You learn your fragility and uncover latent winners.

If nothing stands out at all

The opposite problem: no SKU crosses two percent of sales. Diversity can be healthy, but it can also mean nothing is remarkable. If you cannot name a flagship that reliably introduces people to your brand, the issue may be positioning, not concentration.

Data worth actually pulling (and sharing)

• Share of revenue for the top 1, top 3, and top 10 SKUs over the last 6 and 12 months.
• Gross margin dollars by SKU. The hero might be the worst margin item.
• Stockout dates vs revenue dips to put numbers on supply risk.
• Channel mix for the hero. If Shopping is 80 percent of its traffic, you are exposed to one faucet.
• Repeat rate and LTV for customers who start on the hero vs those who start elsewhere.
• PDP traffic and CVR on the top 10 SKUs to isolate awareness vs conversion problems.

Your turn

What percent of your revenue is tied to your top SKU? Owned-brand and comfy at 75 percent? Reseller sweating at 30 percent? Got a chart or an edge case worth talking about? I’ll surface the most useful submissions so everyone can calibrate against real numbers. Drop it here (anonymous is fine):

→ https://forms.gle/F1JETFN6fASSkCu77

Talk soon,

John Sciacchitano
Ecom Heads: Scale or Die Trying
Connect w/ Me on LinkedIn