When to stop investing in an old product?

The sentiment trap in Polish business

Most business owners we talk to have the same problem. They keep a product in their offer that they started with in 2012 or 2015. This product once built their power, but today it is only a shadow of its former glory. We count every penny and see it black and white in the sheets. If a given good generated a 45% margin in March 2018, and today it barely reaches 11%, we have a problem. The costs of storage, complaint handling, and marketing eat up the profit from other, newer services. At Złoty Standard Marketing, we talk straight about money: sentiment doesn't pay invoices.

Take the example of our client from Grójec, who for years produced parts for older models of agricultural machinery. In 2023, sales fell by another 19%. The owner claimed that 'regular customers need this'. We checked the facts. It turned out that exactly eight of these 'regular customers' remained, and the cost of maintaining the production line for them was 14,200 PLN per month. It was a classic anchor. Because of this one product, the company did not have the production capacity to enter the German market with a new assortment that has a margin of 38%.

The decision to withdraw a product hurts, but it is necessary for survival. In business, there is no place for a museum of achievements. If something has not earned for itself in the last 14 months, it probably never will. At Złoty Standard Marketing, we have been helping to break this psychological resistance since 2016. We show that freeing up space in the warehouse and in the head is the first step to real growth. Your business must earn, not just take up your employees' time. Every hour spent saving a corpse is an hour stolen from new opportunities.

Sentiment doesn't pay invoices. If something hasn't earned in 14 months, it's time to end it.

Hard data versus sales department promises

Salespeople often say that 'it will move soon' or that 'the customer promised a big order in the next quarter'. We check facts, not promises. In analyses conducted for 142 companies in 2024, we noticed that sales announcements rarely coincide with actual transfers. The average forecast error for old products is as high as 42%. This means you are planning a budget based on wishful thinking rather than market realities. This approach is a direct path to losing financial liquidity.

At Złoty Standard Marketing, we introduced a simple indicator: Profitability per Labor Hour (RnR). If servicing an old product takes 34% of your office team's time but generates only 6% of net revenue, the result is obvious. In July 2024, we did an audit in a transport company near Warsaw. They maintained an old route to France because they 'always went there'. After calculating RnR, it turned out that each route brings an operating loss of 1,150 PLN due to empty returns. Only hard numbers opened the board's eyes.

Don't listen to arguments that 'we will fall out of the market'. You will fall out of the market faster if you lack cash for innovation. Focusing on the 20% of products that give 80% of the profit is not a theory from books; it is a practice we have been implementing for years. At Złoty Standard Marketing, we don't play at diplomacy. If the data shows red numbers, we say it loudly. Checking facts is our job, and your job is to make sure every zloty invested in goods returns with a surplus.

Hidden costs of maintaining 'zombies'

Zombie products are those that are not alive but still move in your accounting system. Their cost is not just the purchase or production price. It is primarily an opportunity cost. Imagine that you have 283,400 PLN frozen in goods that rotate once a year. This money could work in a new market, for example, in Romania, where entry barriers are now low and demand for Polish products is growing. Instead, you pay for their insurance, space on pallets, and warehousemen's time.

An additional cost is the distraction of marketing attention. Instead of promoting what gives the most profit, your team tries to resuscitate an old patient. They create social media posts that no one is interested in and buy ads that have a tragic return on investment (ROAS). We've seen campaigns where the cost of acquiring a customer for an old product was 67% higher than the margin on that product. This is not marketing; this is acting to the detriment of your own company.

At Złoty Standard Marketing, we even count the time needed to issue invoices and handle inquiries about these unprofitable goods. It often turns out that the customer service office spends 40 minutes on a phone call about a part for 50 PLN, while ignoring inquiries for 10,000 PLN. These are real losses that are not visible at first glance in the annual balance sheet. Our audit brings these numbers to the surface. Your business must earn in every minute of your team's work.

Zombie products take up space for goods that could finance your new home or company development.

How to conduct the withdrawal process?

If you already know that a product must disappear, don't do it abruptly without a plan. We use the 'three steps' method, which we have developed over the last 8 years. First, we have a clearance sale to recover as much cash as possible. We don't wait for the goods to rust or reach their expiration date. In 2024, we helped a company from Krakow recover 112,000 PLN in just 14 days thanks to an aggressive exit strategy. This money immediately went to buy machines for a new product line.

Step two is communication with key customers. This is the moment we check facts. If a customer actually needs this product, we offer them a final, large purchase with a delivery time of 6 months. This often verifies their real demand. Step three is a total cut-off of support and resources. No exceptions. Since 2016, we know that leaving a 'backdoor' for one customer ends with the zombie product returning to the offer and generating losses again.

Discipline counts throughout the process. At Złoty Standard Marketing, we provide concrete timeframes. Our audit usually takes 3 working days, and we implement the exit plan within the next 7. We don't drag it out forever. The faster you cut the ballast, the faster the company will gain speed. Every day of delay is an average of 430 PLN of wasted potential in a small company and even several thousand in a medium-sized enterprise. We count every penny because we know how hard it is to earn.

Where to look for new profits?

Released resources are a chance for expansion. Poland is too small for some ambitions, which is why we have been intensively helping to enter foreign markets since 2017. The Czech Republic, Slovakia, or the Baltic countries are directions where margins are often 15-20% higher than here. Instead of fighting for survival with an old product in a saturated Polish market, it's better to invest in what the local customer will appreciate. We focus on hard data regarding demand and competition in these regions.

At Złoty Standard Marketing, we don't believe in intuition; we believe in market research. If we plan to enter a new market, we check prices at at least 12 competitors and analyze local tax law. Since September 2016, we have carried out 97 successful implementations into foreign markets. The average payback time for such an investment for our clients is 11 months. This is a much better result than trying to save a product that has been losing market share for 5 years. Your company deserves a better fuel for growth.

Remember that success in business is not just what you do, but also what you stop doing. Eliminating weak links allows you to focus on what really generates cash. We help distinguish one from the other. Our approach is simple: we check facts, cut costs where there is no profit, and build strategies that work. Your business must earn, and we know how to set it on the right track. We invite you to contact us at our office at 126 Marszałkowska St. in Warsaw.