To delete a product on a E-commerce website, 301 redirect or 404?

Let’s get it straight. I already saw google penalties when multiple 301 redirects pointed to the same page. I think about the situation where 10 products have been discontinued and the webmaster decides to redirect the visitors to a product category page or even a product discontinuation page using a 301 redirect. In other words, 301 redirects are bad in this case. Google employees always said that 301 redirects should be an equivalence between two pages. 

What to do when a product is not for sale anymore or if it is discontinued?

Modify the page

Remove the “buy” button, and explain that the product is discontinued or that it is not for sale. Add to the title of page “discontinued”. If a new version of the product or service exists, create a link to the new product or the new service. This is the best solution for a user experience point of view. Also, you don’t lose the Google juice if several pages pointed to the discontinued product page. 

Delete the page

Delete the page, after sometimes, Google will consider the page to be nonexistent and it will remove it from Google. This will return a 404 page not found and it is OK. However, you lose the Google juice of this particular page that benefited your website.