BESTSELLERS GET THE BUZZ…but it’s the boring products that drive your sales.

“What are your best-sellers?”  Almost everybody in the CGTA wants to know the “top 10”.  The fact is, the relative importance of best-sellers is greatly exaggerated.

We’ve all heard the mantra, 80% of sales originate from 20% of products.  The rule of the bestsellers.  It's widely quoted...yet it simply does not exist in practical terms…and it is so easy to identify that it’s a little disconcerting many CGTA players often quote this false statistic.

Here is what a wholesaler’s results would look like if the 80-20 rule was true:

(click chart to enlarge)

All any wholesaler needs to do is get a spreadsheet, identify the top 20% of the products and add up the sales;  do the same with the bottom 80% and the results should look like the chart above.  If the results don’t look like that, and they won't, then maybe it’s time to re-consider the rule!

Having had the opportunity to analyze the sales of a number of CGTA vendors, without exception their results look like this:

(click chart to enlarge)

The top 20% of products usually account for 40% of sales not 80%; that’s half the 80-20 rule! 

And the bottom 80% of products actually account for 60% of sales…3 times the value implied by the 80-20 rule!

If you’re a wholesaler this has huge implications for how you need to manage your inventory, which we’ll explore in a future post.  Bestsellers are nice but they're the icing on the cake…not the cake itself.

What we’ll see in future posts is that it is the ability to produce and manage a large number of products which will have a greater impact on sales.