Paste a list of SKUs and their revenue and get an instant A / B / C classification. Use the output to set service levels, safety stock, and buying priority the way experienced planners do.
One SKU per line, format: name,revenue
Classification
3 A · 1 B · 3 C
Total SKUs
7
Total Revenue
$33400.00
A Share of Revenue
79.3%
C Share of Revenue
7.2%
Formula Used
A: top 80% of cumulative revenue · B: next 15% · C: last 5%
| SKU | Revenue | Share | Cumulative | Class |
|---|---|---|---|---|
| SKU-A | $12000.00 | 35.9% | 35.9% | A |
| SKU-B | $8500.00 | 25.4% | 61.4% | A |
| SKU-C | $6000.00 | 18.0% | 79.3% | A |
| SKU-D | $4500.00 | 13.5% | 92.8% | B |
| SKU-E | $1200.00 | 3.6% | 96.4% | C |
| SKU-F | $800.00 | 2.4% | 98.8% | C |
| SKU-G | $400.00 | 1.2% | 100.0% | C |
A: top 80% of cumulative revenue · B: next 15% · C: last 5%
ABC analysis sorts SKUs by revenue contribution, computes each item's share of the cumulative total, and buckets them into three tiers. A items usually make up 15 to 20% of SKUs but drive 70 to 80% of revenue. B items are the next 30% or so of SKUs. C items are the long tail. Different classes deserve different inventory policies, from safety stock levels to review cadence. Read the ABC Inventory Analysis Explained guide for the operator-level playbook.
A hardware store runs ABC on seven SKUs. Annual revenue totals $33,400. SKU-A ($12,000) and SKU-B ($8,500) together deliver 61% of revenue in the top two positions, so both classify as A items. SKU-C, SKU-D, and SKU-E add another $11,700 and push cumulative revenue to about 96%, making them B items. SKU-F and SKU-G bring up the tail below the 96% threshold and land as C items. The buyer now knows to hold generous safety stock on the two A items, review the three Bs monthly, and consider pruning or reducing buffer on the two Cs. Rerun the analysis every quarter to catch category shifts.
The most common split is 80 / 15 / 5, meaning A items make up the first 80% of cumulative revenue, B the next 15%, and C the last 5%. Some retailers use 70 / 20 / 10 or 85 / 10 / 5. The exact numbers matter less than picking a split and applying it consistently across the assortment.
Both are valid. Revenue-based ABC is the standard starting point. Profit-weighted ABC often gives a more strategic view in categories where margin varies widely, such as apparel or general merchandise. Some teams run both and compare. The Gross Margin Calculator helps compute the profit input if it is not already in your data extract.
Quarterly is standard for most retail categories. Monthly for fast-moving or trend-sensitive categories such as fashion or electronics. Any category that just went through a season, a new-product launch, or a merchandising reset deserves an immediate re-run before the next planning cycle.
A items usually earn a 97 to 99% service level, which pushes their safety stock and reorder point higher. B items sit at 92 to 95%. C items run leaner at 85 to 90%. Loss-leader SKUs that pull traffic can justify 99% or higher regardless of their revenue rank.
Yes. Strategic overrides exist for a reason. A traffic-driver, a signature item, or a low-revenue product that anchors a category should be flagged as A even if the math says B or C. The classification is a starting point, not a verdict.
Not every C item deserves to stay. A quarterly SKU rationalization pass typically prunes the bottom 5 to 15% by profit contribution. For the C items that stay, lean on lower safety stock, longer review cycles, and simpler replenishment. See the Inventory Management Best Practices playbook for the full workflow.
ABC tells you WHICH SKUs deserve tight replenishment discipline. EOQ tells you HOW MUCH to order in each PO. Combine them: run EOQ carefully on A items, use rough approximations on C items where the ordering cost dwarfs the holding cost.
Compare against the Inventory Turnover Benchmarks by Industry once you have ABC-tiered service levels in place. If A-class turn is dropping year over year, safety stock is probably too generous. If C-class turn is high, the assortment may already be lean enough.
Deep-dive guides that explain the math behind this calculator.
How buyers and finance actually work gross margin. The formula, three what-if scenarios, the margin-vs-markup translation, category benchmarks, GMROI, and the seven levers that move margin on purpose.
How retail buyers actually work markup. The formula, three what-if scenarios, category benchmarks, keystone pricing, the markup-to-margin translation, and the levers that keep markup honest against turnover.
The most honest profitability metric in retail. How buyers and category managers actually use GMROI to make cross-category assortment, pricing and open-to-buy decisions.
Measure how many times a year your average inventory sells through and gets replaced. The single most consequential operational KPI in retail. It connects buying decisions, warehouse cash, markdown risk, and finance targets into one number. The turn ratio arrives converted into days and weeks of supply, together with the working capital a one-turn improvement would release. Departments that carry stock at retail value rather than cost usually track it with a retail inventory method tracking template, which produces the same average-inventory figure this calculator needs.
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Set the trigger level that fires the next PO for an SKU. Reorder point combines expected demand during lead time with a buffer for the weeks that run hot. Get either half wrong and you either stock out or bury cash on the shelf. Outputs are the ROP itself, the lead-time demand behind it, the buffer as a percent of expected demand, and the days of supply that ROP represents at current sales velocity.
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Find the order size that minimizes what you spend keeping an SKU stocked. Small orders push order cost up. Big orders push carrying cost up. EOQ finds the point where the two curves cross so you stop paying more than you have to, and it anchors every reorder point and safety stock decision downstream.
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The cleanest read on how much of every sales dollar you actually keep after paying for the goods. Gross margin drives every downstream financial decision in retail: what to price, what to promote, what to keep on the shelf. Margin percent, the markup equivalent, cost as a percent of revenue and the price-to-cost multiplier all appear together, which is what it takes to translate between the three lenses without reaching for a second tool. The COGS input behind all of it depends on how inventory is valued in the first place, and a retailer using the retail inventory method will get a different COGS figure than one costing at actual unit cost, even from identical sales and purchase data.
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Handpicked benchmarks, templates and guides to help you dig deeper.
Five core calculators every buyer, merchandiser and category manager reads together. Open the metric that is behind, and let the others sanity-check it.
Percent of revenue kept after paying for the goods. The anchor number on the retail P&L.
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Percent added on top of cost to reach the selling price. The buyer’s pricing language.
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Gross profit per dollar of average inventory. The honesty check on margin and turnover.
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Units sold as a percent of units received. The leading indicator for markdown timing.
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How many times average inventory sells through in a year. The core inventory KPI.
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