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How to set up ABC classification?

Youri Moskovic avatar
Written by Youri Moskovic
Updated over 11 months ago

Setting up ABC classification

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ABC classification = system of identifying and grouping products or SKUs in terms of their performance with A being the highest, C the lowest.

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Step 1: Go to Settings > Inventory

Step 2: Define ABC by Products or SKU and Metric by Sales or Revenue

Step 3: Enter % for each classification

Step 4: Click 'Save Changes' on the Settings > Inventory page

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If there are products that you don't want to include in the analysis, include them into the "Remove from analysis" section. e.g. gift bags, cards etc.

We recommend classifying products into three categories:

  1. A → high performing products you don’t want to run out of stock (between 20 - 70%)

  2. B → Represents the majority of your products and you'd prefer not to run out of stock (between 20-70%)

  3. C → Low performing products that will have a lower business impact if they are out of stock (between 5-20%)

Prediko automatically analyses historical product performance (units sold/revenue) and distributes products across each category based on their percentage allocation so you don’t have to do any calculations yourself!

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