The Overlooked 80%: Why Your Slow-Moving SKUs Deserve More Attention

In warehouse management, the 80/20 rule, also known as the Pareto Principle is a widely accepted truth: roughly 20% of SKUs drive 80% of throughput. These "A-movers" are the lifeblood of fulfillment operations and are typically given prime real estate in the facility. But what about the remaining 80% of SKUs? These B- and C-movers may not be fast-moving, but they’re often the largest contributors to warehouse complexity, cost, and inefficiency.

Understanding the cost of the forgotten 80%

While A-movers get optimized storage, automation support, and consistent attention, the slower-moving 80% of SKUs are frequently stored inefficiently, scattered across the facility, shelved in difficult-to-access areas, stashed in upper levels of pick modules, or simply left unmanaged in long-term storage zones. This can lead to a variety of challenges:

• High Cost Per Unit Stored: Slower-moving SKUs take up valuable space, often without proportional return. Poorly optimized storage increases your cost per square foot.
• High Cost Per Unit Picked: When these SKUs are needed, often in low quantities, they can be hard to find or require long travel distances, spiking labor costs.
• Shrinkage and Misplacement: Items that are infrequently touched are more prone to being misplaced or even stolen. Inconsistent cycle counts and poor visibility lead to stockouts, reordering of already-owned items, or customer dissatisfaction.
• Inefficient Inventory Turns: Inventory carrying costs are inflated when stock sits idle for long periods, especially if environmental controls or special handling are required.
• Risk of Obsolescence: Some SKUs, particularly in industries like electronics or apparel, may become obsolete before they’re picked, leading to write-offs or markdowns.

What industries are most affected by long-tail SKUs?

Certain industries are inherently prone to large slow-moving SKU catalogs due to the nature of their products and service models:

The growing challenge of SKU proliferation

In today’s economy, consumers expect personalization and choice. This trend, fueled by e-commerce, has led to explosive SKU proliferation. A brand may once have offered five options; now it’s 50, or even 500. Whether it’s a variety of finishes for cabinet hardware, colors of reusable water bottles, or trims for kitchen appliances, more choice equals more complexity.

As SKU counts balloon, the Pareto curve steepens: the top 10-20% of SKUs generate more and more of the throughput, while the rest clog up warehouse space.

How can AutoStore help address the long-tail SKU challenge?

When it comes to managing slow-moving SKUs, few solutions rival the efficiency and cost-effectiveness of AutoStore. Unlike traditional racking or even other automated storage and retrieval systems (AS/RS), AutoStore is uniquely designed to maximize space utilization while minimizing the cost of storing inventory that moves infrequently.

Here’s how AutoStore helps optimize the long tail:

1. Unmatched storage density

AutoStore’s cube-based design enables the highest storage density of any AS/RS on the market — up to 4x more bins per square foot than traditional shelving or racking. This makes it the ideal solution for consolidating long-tail SKUs into a compact footprint, freeing up valuable warehouse space for faster-moving inventory or other operations.

2. Cost-effective inventory holding

Unlike most AS/RS platforms where each SKU stored comes with a proportional cost (due to shuttles, lifts, or fixed-position robotics), AutoStore's cost structure works in favor of long-tail SKU management:

• Robots drive most of the cost, not the storage infrastructure.
• Storage components (bins and grid), represent only 10% to 15% of total system cost. This means you can add hundreds or thousands of slow-movers into the grid without significantly increasing capital expenditure. You're essentially adding storage capacity at a marginal cost.

3. Low cost per-unit stored

Most warehousing distributors don’t realize that they are spending the majority of their cost per square foot leasing space for inventory that barely moves. The A-movers, the 20% that drive 80% of revenue, typically take up far less space. It’s the long tail that eats up real estate. By consolidating these SKUs into a high-density AutoStore grid, companies can drastically reduce their physical footprint, lower lease costs, and make every square foot work harder.

4. Flexible access to rarely picked items

Even if a SKU is only picked once every few months, AutoStore robots can retrieve it just as easily as a high-velocity item. There’s no penalty in labor or time when accessing long-tail products. Every bin is accessible, and bin location doesn’t impact retrieval complexity, something traditional AS/RS systems and manual operations can’t say.

5. Scalable growth without overbuilding

As SKU proliferation continues, adding new bins and expanding the grid is simple and non-disruptive with AutoStore. You don’t need to overbuild or reconfigure entire systems. This flexibility is critical as long-tail inventory grows due to market expansion or consumer demand for customization.

Conclusion

By leveraging AutoStore for slow-moving SKUs, distribution operations can turn what was once a cost center into a model of efficiency. Rather than letting the long tail drag down warehouse performance, forward-thinking operators are using AutoStore to rein it in — densely, affordably, and smartly.

‍