In the constantly evolving world of e-commerce, effectively managing your product portfolio can be a challenge. Let alone to understand what products bring in the value and how that changes over time. ABC analysis is a handy tool, yet it often takes a lot of resources or manual work. We at Sniffie are on a path to make pricing simple for e-commerce, and to help you with that we released a new feature: Dynamic ABC analysis.
Dynamic ABC analysis
At its core, the Dynamic ABC Analysis feature is a pioneering AI algorithm that recalculates your product portfolio into ABC groups based on three key parameters: revenue, profit, and volume. Designed to streamline filtering, pricing analytics and dashboards, and dynamic pricing workflows, this feature is a game-changer for businesses looking to boost their pricing efficiency and profitability.
A Deeper Dive into Dynamic ABC Analysis
Dynamic ABC Analysis takes the traditional ABC inventory categorization and adds a new layer of intelligence to it. Earlier on your ABC classifications were updated maybe quarterly and were mainly done manually in Excel. With the help of AI, we generated a Dynamic ABC Analysis that is reliable, quick and dynamic. For a quick refresher, ABC classification is a method of sorting inventory into three categories:
- Class A represents about 20% of the products, which are the highest profit contributors.
- Class B signifies the next 30% of products with moderate profitability.
- Class C encompasses the remaining 50%, usually the least profitable products.
However, Dynamic ABC Analysis goes one step further by dividing each category into three subcategories. For instance, class A products are further divided into subcategories
- A1 (the best 0%-6.7%),
- A2 (the following 6.7%-13.4%), and
- A3 (the rest of A1 representing 13.4%-20%),
providing a more granular view of your product portfolio’s profitability.
Why machine learning and AI are the future of product pricing?
AI is a buzzword like no other. We sat down, wrote all we know about it and let you be the judge. Here is a seriously indepth 50-page insights on how to use artificial intelligence in pricing. Hope you find it useful!
How to use Dynamic ABC Analysis in different pricing workflows
Let’s explore how this innovative new feature can supercharge your operations across three key areas:
1. Filtering
Using Sniffie’s global filters, you can streamline your product catalog by selecting specific ABC categories. This means you can focus solely on for example ‘A1’ products, if desired, allowing you to zero in on the products that matter most. Further refine your filtering by incorporating other parameters such as revenue, category, or AI insights, creating a tailored pricing or analytics workflow.
2. Analytics and dashboard
Sniffie’s pricing dashboards incorporate Dynamic ABC Analysis, enabling you to create widgets and compare crucial aspects like revenue, profit, or volume development across different ABC categories. This provides rich, comparative insights to guide your strategic decision-making.
3. Automate your pricing strategies
Harness Dynamic ABC Analysis to shape your pricing strategies. By creating filters that utilize this feature, you can trigger automatic pricing changes based on a product’s category. For instance, if an ‘A1’ product’s volume is lower than expected, workflows could automatically adjust the price to stimulate sales.
A Tool for Every Team
The versatility of Dynamic ABC Analysis extends its utility across various teams within an organization. Whether you’re part of the pricing, category management, or supply chain team, this feature can provide essential insights into how product performance and pricing influence your daily operations.
In conclusion, Sniffie’s Dynamic ABC Analysis feature offers a powerful, sophisticated way of optimizing your product portfolio management. By providing real-time, AI-driven classification based on revenue, profit, and volume, this tool not only simplifies operations but also empowers businesses to make data-driven decisions that drive profitability. Welcome to the future of e-commerce – it’s as dynamic as your business needs to be.