Most ABC tools only rank by revenue. The interesting story is usually margin — an SKU selling aggressively at 8% margin can dominate your revenue and destroy your profit. This calculator lets you choose the criterion before you classify.
Schematic only. Your curve will be drawn from the SKUs you enter.
ABC analysis is the Pareto principle applied to inventory: rank SKUs by some measurable criterion, find the small fraction that drives most of the result, and spend your management attention accordingly. It is one of the oldest and most robust inventory tools, dating back to a 1947 GE quality study.
The clever bit — and what most online ABC calculators fumble — is choosing the right criterion. Revenue is the textbook default. But a SKU that brings 30% of your revenue but only 3% of your gross margin deserves different treatment than a low-revenue, high-margin SKU. This tool lets you classify by:
The classification table is the main output, but the cumulative curve is the part that actually teaches you something. A well-managed inventory typically produces a curve like the schematic above: a small A cluster (top-left steep rise), a longer B slope, and a long tail for C. If your curve is closer to a straight diagonal, you have a uniform mix — ABC tells you less, and operational differentiation matters more.
Enter each SKU's units sold and either unit revenue or unit margin. Add or remove rows as needed.
| SKU | Units sold | Unit price ($) |
|---|---|---|
Use the classification as a triage tool, not a verdict on individual SKUs. The A group deserves the most attention: tighter safety stock monitoring, supplier-managed replenishment, accuracy on cycle counts, and the first claim on slotting improvements. The C group deserves radical simplification: bigger MOQs, longer cycles, less frequent counts, smaller safety stock relative to demand — if the SKU is fit for that. The B group sits in the middle and is usually best served by a simple periodic review policy.
The 80/15/5 split is a good starting point for most catalogs between 100 and 10,000 SKUs. If you have more than 10,000 SKUs, the A group typically gets tighter (60-70% of contribution) and the C group thicker. If you have under 100 SKUs, ABC is probably not the right tool; it gets noisy. Use one of the more granular analyses like GMROI instead.
A: 20 minimum for the result to be meaningful; 100+ for it to be reliable.
A: Some catalogs are uniform (warehouse distribution, commodity industrial supplies) and ABC reveals little. Other catalogs have a "hyper A" — one or two SKUs that take 40% of everything, with a long thin tail. Both are normal.
A: Re-run with margins as the criterion. If A items still aren't profitable, the problem isn't ABC — it's pricing, sourcing, or your mix.