How product performance analysis helps you boost profits

Throughout all types of industries, businesses have products that perform brilliantly and generate income and others that don’t do quite as well. The key is knowing which products are the star performers and boosting them as much as possible, and also evaluating the ones that don’t perform well, taking in a number of factors. This is where analysing data correctly is hugely beneficial.

Shopify's ABC Inventory Analysis:
A Starting Point

Shopify's ABC analysis is a valuable tool that categorises products based on sales performance (A- high performers, B- moderate performers, C- low performers). This helps with basic inventory management, ensuring you have enough stock for your best sellers.

This report grades products based on recent revenue data. However, sales figures alone don't tell the whole story.

For example, a high-selling item might also have a high return rate, eating into your profits., Or a product with a healthy profit margin may require heavy advertising. Standard e-commerce reports, like Shopify's ABC inventory analysis, often lack the depth needed for fashion e-commerce brands to have a true understanding of their assortment’s performance.

NSL’s Product Performance Ranking:
A Deeper Dive

Here at NSL, we've created a sophisticated system called "Product Performance Ranking" that builds upon the foundation of Shopify's ABC analysis. Our model uses machine learning to analyse various factors beyond just sales figures, including:

• Return Rates: Identify products with high return rates to proactively address potential issues and minimise losses.
• Profit Margins: Understand the true profitability of each product, taking into account production costs and advertising spending.
• Advertising Return on Ad Spend (ROAS): See how effectively your advertising efforts are performing for each product.
• Stock Velocity: Track how quickly products are selling to anticipate inventory needs and prevent stockouts.

This comprehensive, unified approach gives brands a much clearer picture of their product performance, allowing for data-driven decisions that optimize profits.

Benefits You Can Expect

By leveraging data-driven insights, you can transform your product mix into a powerful data-driven decision-making resource. Our "Product Performance Ranking" helps you identify your star performers, optimise campaigns, and ultimately, unlock greater profitability for your fashion brand.

• Tailored advertising spend: Maximise impact by knowing how to spend your budget effectively.
• Place better production orders: Choose better quantities by knowing which styles perform best.
• Increased profitability: A clear understanding of product performance allows you to optimise sales efforts and maximise revenue on your most valuable items.

Our Growth team works with fashion brands with a winning combination: providing expert strategists specialising in paid advertising for Shopify stores, and actionable insights from our Data Dashboards and data consultancy.

Reach out to new@notsellingliquid.com so we can work together.