This is why we must learn to manage them well. How to optimize your stocks? How to increase your level of profitability? What is the ABC analysis method by product and why is it essential to develop your online business? How to manage your products in the light of this technique? Explanations on this strategic e-commerce KPI . What is an ABC analysis? This data analysis technique allows you to identify which products are performing well and which are less profitable . Thanks to the method, you therefore keep control over your stock , being able to determine which products are profitable. What are the calculation principles of the ABC method? ABC analysis is base.
On the Pareto principle
The latter is base on the idea of an unequal distribution between the use of resources and what they yield, ie their yield. While keeping the 80/20 law as a reading grid, the ABC method calls for a division of your products into three categories Class A These are the products that earn you the most. They often represent only a small part of your stock and Spain Email List yet generate around 80% of your turnover. These products are the stars and should be preferre class B which represent approximately 15% of your turnover. They must be manage bearing in mind that they vary between class A and class C in terms of profitability class C These products are the least efficient.
You don’t have to prioritize them
Why use ABC analysis? Building up and then managing inventory is a complex task for businesses , and therefore for online store owners. The priority for DP Leads an e-merchant is indeed to dispose of its stock, so as not to record any loss. However, it is difficult to know in advance, simply by instinct, which products will work, in what proportion, and which will be abandoned. How to optimize a stock? By finding the perfect balance between having a sufficient quantity of products in stock, in order to satisfy customers, without incurring excessive storage costs If you sell out your inventory of featured products too quickly , you may disappoint other customers who wanted to buy these items from you.