Winners, Losers, and Chasers
Winners, chasers, and losers divide your products into three categories. Winners are your most profitable products. Losers are products that are not selling and not appealing to your customers. Chasers are products that may attract customers but are not top selling products, which make up the bulk of your stock.
Prerequisites
This is a Cin7 ForesightAI feature and requires an add-on to your subscription.
You will need at least 3 months of sales history in Cin7.
ForesightAI insights
Should you sell more profitable products at high volumes? Or less profitable products at low volumes? Cin7 Core ForesightAI uses forecasting data and your own sales history to find the answer.
To split your inventory into Winners, Losers, and Chasers, we look at the a product's retail price, purchase price, and sales volume. With these numbers, we can divide the entire sales portfolio from most profitable to least. Sales volume plays a big role in this sorting process. You can sell an extremely profitable product once every three months, but a product with less margin that sells a thousand units weekly would make more in profit.
Winners includes only about a fifth of all products but produces about 80% of the revenue.
Chasers contains a majority of the products, but only about a fifth of your total revenue. These are your Chasers.
Losers bring in no or almost no revenue.
The winners and losers categories display the results of this analysis on your dashboard, along with the availability of each category. Understanding the dynamics of your portfolio becomes a fast daily check, saving hours of unnecessary manual data work. Once you've identified which products fall into each category, you can decide your next steps.
Winners
Winners have high margins, and although they make up a relatively small share of your products (typically under 20%), they generate the majority of your profits.
Stockouts (when an inventory item in demand is out of stock) on these items significantly damage your business results. You want these goods available at all times, and with enough buffer stock to get through any sales spikes without running out.
Chasers
Chasers are the majority of your products. As a whole, they attract customers to your store. But the individual products may not sell enough to be Winners.
You could stock your store only with Winners, but it's unlikely your customers would appreciate such a small product offering. Customers choose stores that offer a large variety of goods; these are your Chasers. Without Chasers attracting customers to your shop or site, it's harder to sell Winners.You want to keep chasers available, but it's not a business emergency if you face a stockout for a day or two on these items.
Losers
Losers bring in very little or no revenue. Nevertheless, they can cost you money in the form of storage fees, products expiring before sale, and other associated costs.
We recommend that you don't reorder losers and remove the ones you have in stock from from your inventory. This will not reduce the amount you still have in stock but will prevent the loss from growing. You could offer to sell losers at a big discount, as even zero margin sales are preferable to letting goods expire in your warehouse. Alternatively, you could try to negotiate with your suppliers for a buyback.
Optimizing availability
All of this analysis leads to optimizing your service level when planning replenishment. This number (measured in percent) determines the availability of goods at all times. 100% service level means that of 100 customers who wish to buy a product, 100 will have their demand satisfied. 50% means that every second customer goes home without the goods. Cin7 ForesightAI sets the service level for Winners is to 99.5% (to account for fluctuating sales trends). Chasers are set at 95.0% and Losers have no service level because we want to sell out of those products.
Winners and Losers in Cin7 Core
When you are signed up for Cin7 ForesightAI you can what percentage of your stock are Winner and Loser products, and their respective stock values. Use the dropdown field to switch between your organization's locations. It's best to look at Winners and Losers location by location, as items can perform very differently depending on their environment.
Clicking the dashboard widget will take you to the Winners and Losers Report, where you can see a detailed breakdown of your SKUs in each location and from each supplier.
Winners are marked with a crown in the Product Availability Report.
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- Publish to everyone.4.log-2010416261.zip30 KB