Catalogue selection is the single most underrated decision a new e-commerce founder makes. People agonize over store design and ad copy while quietly committing six figures of working capital to the wrong fifty SKUs.
The three-axis framework
Every SKU we evaluate gets scored on three axes: margin, velocity, and supplier reliability. None of the three is sufficient alone. The best products are above average on all three.
Margin
Real margin, not list-price margin. Subtract landed cost (including shipping, customs, VAT pre-financing), payment processor fees, return rates, expected discount depth, and the platform commission if you sell on marketplaces. We will not stock anything below 35% net margin on a new store. The exposure is too high when you are still learning.
Velocity
How fast does this SKU move? Use marketplace data: search volume, BSR, competitor stock turn. A SKU with great margin but no buyers ties up cash. A SKU with thin margin but high velocity at least teaches you the operational basics quickly.
Supplier reliability
Can you reorder this when you sell out? At what lead time? At what minimum quantity? A SKU you cannot reliably restock is worse than no SKU at all — you stockout exactly when momentum builds.
The 50 SKU split
Of your first fifty, we typically recommend: 10 hero SKUs (high margin, proven velocity, reliable supply), 25 catalogue depth (mid margin, mid velocity, easy to source — they fill out the store and look professional), and 15 long-tail experiments (margin testers, new categories, items you want to learn about). Track them separately. Re-evaluate at month three.