ABC Category

All products are automatically categorized (A, B or C) based on margin and sales order lines.

 

Optiply categorizes the products in three letters in order to determine your own strategy for three product groups. The three categories are:

  • A - Fast-selling-products, high return
  • B - Middle category
  • C - Low sales, low margin, new products

With these categories you can determine a purchasing strategy based on delivery reliability in the general settings. The categories are determined on the basis of the available data from the past 365 days. The categories are updated every night, and when you change the general settings of the categories.

Gross Margin 

By default, the products are classified on the basis of the total margin in the past year. We rank the products based on:

margin (ytd) = number of times sold (ytd) x gross margin 

The gross margin is determined here on the basis of the current purchase and sales price. 

It is also possible to categorize products by number of sales order lines or by revenue. If you want to use this, let us know via the chat or email at support@optiply.nl. We set it up for you.

 
ABC category

Image explanation:
The products with the highest margin in the past year that provide 70% of your total annual return will be classified in category A. The products with the lowest margin that provide the lowest 5% of your total return will be classified in category C.


Two examples: 

  • If you have a product that is sold frequently and has high margins, the product will be classified in category A. 
  • If you have a product that is sold very little but has high margins it will be classified in category C.

It is not possible to manually divide products into categories. You can, however, adjust the bruto margin, so that a product ends up in the desired category sooner or later.


Order lines 

If you choose to classify your products based on the number of sales order lines, we will rank the products based on: 

number of times sold (ytd)

Note: this is not the same as the total number of products sold. We look at the number of times a product returns on a sales order. A sales order line of 20 pieces therefore carries the same weight as a sales order line of 1 piece. 


We recommend using this setting if you want to optimize purchasing based on operational condition. For example, because the warehouse is getting full, or because the number of orders is getting too large. 

Turnover 

If you choose to classify your products on the basis of turnover, we will rank the products on the basis of: 

turnover (ytd) = number of times sold (ytd) x sales price 

We recommend that you use this setting when the purchase price of products fluctuates strongly or is poorly available. Or when you want to classify your stock based on financial performance. 

Purchase rule option 


In addition to the standard category determination, it is possible to set a purchase rule. This ensures that products remain classified in the C category until they have a minimum number of sales rules. If you want to use this, please let us know. We set this up for you. 

Example: If you have set a purchase line of 5 and you set the delivery reliability of the category C category to 0, then a product that has less than 5 sales lines will be

Note: When the purchase rule is in effect, a product must have sold enough and meet the other condition. When the product meets both rules, it can become a B product.