ABC analysis: Definition, Formula & Why It Matters

ABC analysis ranks inventory into three classes by revenue contribution. Class A items (about 20% of SKUs) drive roughly 80% of revenue, Class B the next slice, and Class C the long tail. It focuses attention where it pays off.

ABC analysis formula

% impact = annual item revenue ÷ total revenue × 100, then rank and assign A/B/C

Example

Your top 20% of listings by revenue are your Class A items and deserve the tightest attention.

Why it matters for Reverb sellers

ABC analysis ensures you never run out of your best sellers while avoiding over-investment in slow movers. It turns a sprawling catalog into a clear set of priorities.