ABC Analysis for Warehouse Inventory: A Practical 30-Minute Guide

ABC analysis is one of those techniques that sounds boring until you try it once � and then you can't imagine running a warehouse without it.

The 80/20 rule for stock

Roughly 20% of your SKUs will generate 80% of your revenue. Another 30% will generate 15%, and the remaining 50% will scrape together the last 5%. ABC analysis splits those into three groups so you can focus your time and capital correctly.

Running your first analysis

1. Export 12 months of sales by SKU.
2. Multiply units sold by margin to get annual contribution.
3. Sort high to low.
4. Mark the top 20% as A, the next 30% as B, the rest as C.

What to do with each class

• A items: tight reorder thresholds, frequent cycle counts, premium bin locations near dispatch.
• B items: standard reorder, monthly cycle counts.
• C items: long reorder cycles, quarterly cycle counts, deep-storage bin locations.

Most cloud WMS platforms can run ABC reports in a single click. VasKem includes it.