Keeping your stock always organized is essential to keep control of your stock, in addition to helping your entire company run smoothly.
That’s why it’s important to know your stock, and use tools that can help organize and collect information about everything in it.
Among the tools used to help with inventory management is the ABC curve, which consists of organizing your products in stock according to their importance, optimizing your inventory. Want to know more about the ABC curve? Read on.
What this article covers:
Inventory ABC curve and its importance in management
In addition to being another tool that helps you organize your stock, the ABC curve provides a better view of your products, since it is possible to measure the most important goods, avoiding stock shortages, and consequently making your customer look for for that product elsewhere, reducing its sales.
This broader view of your stock also allows you to perceive products that are not so relevant to your consumer, enabling them to be out of stock through strategic stock-burning actions.
In this way, your company manages to keep its stock balanced, with only the most important products meeting the demands of its customers, providing increased sales and consumer satisfaction.
What are the advantages of the ABC curve?
Much more than helping to organize and better manage your inventory, the ABC curve has many other advantages for your business, boosting your results and optimizing processes. Check out!
stock and demand
Another advantage is to keep your stock always aligned with the needs and demands of your consumer, so the customer already knows that he will find what he needs in your store, since your stock is stocked primarily with the most relevant items for your audience. target.
The company’s logistics are also positively affected, because once you know which items are in stock with the highest output on the market, it is possible to optimize this process by purchasing the goods at the exact moment, not letting them run out of stock. , and even if it accumulates beyond what is necessary.
Unnecessary financial expenses are reduced as purchases are made strategically, avoiding waste and accumulation of unnecessary items in stock, allowing capital to be used intelligently within the company on other priorities.
If your store has e-commercefor example, with a solid and stocked stock, deliveries will happen faster, increasing productivity and making your consumers more satisfied.
ABC Curve Operation
The ABC curve lists the products that are most relevant to your company and highest sales.
The function of the tool is to make a list of products of greater value and relevance and catalog them according to this information.
On curve A are the products of greater value and relevance, that is, those that are generally the best sellers in your store. These are those products that cannot be missing from your stock, since they correspond to a large portion of your company’s sales.
The products that make up curve B are part of the median relevance of your stock, it is important that you have them in stock, but they are not responsible for boosting your sales.
These are the products with less relevance in your company, so they will not contribute as much to your company’s total revenue.
Customer ABC Curve
It is important to emphasize that the ABC curve can also be applied to your brand’s customers, considering the values and volumes of product consumed by them.
Class A customers are those who buy a lot from your company and when they buy the most expensive products, that’s why they have a significant impact on your total sales revenue.
Class B does not buy like class A, but even so, when they buy, they choose your company, contributing in a median way to your company’s total revenue.
Class C customers are the ones who buy the least, with little impact on their final sales revenue. These customers consume less frequently and always opt for more affordable and cheaper products.
How to make the ABC curve?
There are already automated and optimized tools that gather all the information and register the products according to the information of each commodity, facilitating the work of inventory management.
However, for those who do not have this feature, it is possible to make an ABC curve spreadsheet where you just need to enter the name of the merchandise and the amount of revenue generated to catalog your stock.
The ABC curve, in addition to keeping your stock aligned and gathering important information, is a great ally in listing your products, keeping your stock balanced with what is needed and is more profitable, enabling better results and customer satisfaction.