Prioritization Matrix
At the core of what we are building with Cogsy, we believe in building tools that acknowledge the constraints that all businesses face. Often these constraints relate to available cash flow and thus the working capital you have available to invest in inventory.
To that extent, not all of your products are equal and we built our prioritisation matrix to help you optimally invest your working capital into the products that contribute most and best to your business' growth.
We built our prioritisation matrix by considering the following factors for every product:
- Sales Volume / Value. This is the total, historic monetary amount of sales related to this product.
- Sales Velocity. How quickly does a product sell based on individual units?
- LTV. We calculate the customer lifetime value (LTV) based on which products a first-time customer buys. Some products (when purchased in their first order) creates a higher LTV over time and should thus be prioritised.
- AOV. We also calculate the average order value (AOV) for when a product is included in a specific order.
We then map out all of your products on a matrix that looks something like this:
This is where we then derive ranks like "A+" or "B" or "C-" which you can see throughout the Cogsy product pages.
