How are products classified?
Products are categorised into four classes based on profit and sales performance:
Class A (Winners): High profit and consistent sales (≈70% of sales velocity).
Class B (Contenders): Reasonable profit and good sales (≈20% of sales velocity).
Class C (Underperforming): Lower ROI (≈10% of sales velocity).
Class D (Dead): Negative profit or no sales at all. Note: Newly launched items also start in Class D until their first sale.
A product is placed in Class D only if it records zero sales for the entire selected date range.
So What makes a product fall into Class D (Dead)?
Example Scenario
Date Range: July 1 – July 31
Product: Fry Pan
July 1–13: Fry pan makes sales → temporarily considered Class A (based on this period alone).
July 14–31: Fry pan is out of stock → 0 sales.
Question: What is the fry pan’s class for the full date range of July 1–31?
Answer:
It depends on total sales contribution, but one thing is certain: The fry pan cannot be Class D (since it did record sales).
Its classification will be A, B, or C, depending on cumulative sales compared to total website sales.
Examples
Website sales (July 1–31): $100k
Fry pan sales (July 1–13): $50k
Other products: $30k
Fry pan contributes 50% of total sales → Class A
Website sales (July 1–31): $100k
Fry pan sales (July 1–13): $30k
Air fryer sales (July 14–31): $70k
Fry pan contributes 30% → Class B
Air fryer contributes 70% → Class A
Key Clarification
The classification system is based only on sales performance within the selected date range.
Out-of-stock periods do not affect classification; only total sales do.