Determining which products to keep and which to replace
I am trying to find out if there are any algorithms, rules or best practices when deciding which products are keepers and which I should jettison to make room for new potential candidates.
For example, I sold $58,000 in books this year and carried 358 titles. The top selling title generated $777.40 in sales, the worst performing title sold 1 copy at .99 cents.
If I dropped the 10% of worst selling titles it would amount to 36 titles which generated $361 in sales collectively. The other way I considered is dropping the worst 130 titles which makes up 10% of my sales volume ($5,800). Does either approach make sense?
I think you’re on track. There’s no set algorithm to follow per cutting slow movers. You’re balancing the cost of carrying (I’m guessing these are physical books?) stock vs. profitability. I think the bottom-percent approach is the simpler one to manage, but if you want to cut a specific number of titles to open up shelf or warehouse space, you need to check profitability per title, not just gross revenue. There may be some low-revenue but high-profit titles hiding in the ranks that might be worth keeping around. Hope this helps, good luck!