The Graded Inventory Analysis (ABC analysis) report features a bar chart titled "Total Value (Price) by Product Grade", which gives you an overview of the distribution of product value levels within your current inventory. This report aids in identifying which products should be prioritized when replenishing stock and which should not receive excessive replenishment. If you run out of A-grade products, you could miss significant sales opportunities. Conversely, overstocking C-grade products may lead to unnecessary storage costs.

 

In This Article

• Product Grade Classification
• ABC Grade Product Strategies
• ABC Analysis Report

 

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Product Grade Classification

In inventory management, the classic "Pareto Principle" suggests that the majority of outputs are produced by a minority of inputs. "ABC Grade Analysis" follows this principle, dividing products into three grades based on the percentage of sales revenue each variant has generated over the past 28 days:

• A-grade: Top-selling products that account for 80% of total sales revenue.
• B-grade: Products that account for 15% of total sales revenue.
• C-grade: Products that account for 5% of total sales revenue.

 

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ABC Grade Product Strategies

A-grade Products

A-grade products constitute 80% of your total sales revenue and are your top performers. You should focus heavily on these products as a shortage could significantly impact your revenue. Consider the following strategies for A-grade products:

• Exercise better control and protection of A-grade products to prevent damage and theft.
• Always maintain a ready stock of A-grade products. Consider keeping backup inventory and reordering these products well in advance before you anticipate them running out.
• Increase the visibility of A-grade products in marketing and promotional activities.

B-grade Products

B-grade products constitute a moderate proportion of your product sales total. These products are not as valuable as your A-grade products and typically fall in between A-grade and C-grade. For these products, you can consider applying the following strategies:

• Maintain a steady stock of B-grade products. Reorder these products in a timely manner so new stock arrives before the current stock is depleted.
• Promote B-grade products as bundles or add-on products with A-grade products.
• Apply A-grade strategies to B-grade products that occasionally perform at an A-grade level and C-grade strategies to those that occasionally drop to a C-grade.

C-grade Products

C-grade products make up a small part of your total sales revenue and are often considered "dead stock" or "slow-moving inventory". However, they still generate some sales, and selling them off may lead to poor customer experience. It will be more profitable if you sell off the remaining inventory and remove them from the product catalog. For C-grade products, you can consider applying the following strategies:

• Sell the C-grade product inventory at a discounted price and remove them from your product catalog once sold.
• Offer C-grade products for free as a promotional gift when customers purchase other items to boost overall sales.
• Donate C-grade products to charitable organizations.
• Reduce the frequency of ordering C-grade products or order just in time to lower warehouse costs.
• Cease ordering C-grade products unless they have other purposes for your business.

 

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ABC Analysis Report

The ABC analysis report features a bar chart titled "Total Value (Price) by Product Grade", which gives you an overview of the distribution of product value levels within your current inventory. 

This report only includes products that have generated sales in the past year, with sales data based on the past 28 days. Data is updated daily to provide the most updated information. 

You can find the report in Analytics > Reports > Inventory > Graded inventory analysis.

Below are the fields in the "ABC Grade Analysis" report: