3 Replies Latest reply on Jun 15, 2017 11:39 AM by Michael Gillespie

# Identifying the percentage of products that make up 80% of your sales?

Hi All,

I really do not know where to start with this. I've been given a business question that I have modified slightly to relate to the standard superstore data set.

The question is how many products make up 80% of my sales? We want to see if we are carrying products that add little to our business and thus reduce our product portfolio.

I am sure there is some statistical term that describes this type of analysis but it eludes me.

Referring back to the Superstore data set, I want to see in a given time period by category the percentage of products that contribute to 80% of the total sales in the same time period. If the category is low then I will want to drill down and start seeing where the problems products are. Initially though I need to see it by category.

In my head I see the following steps:

1. Need to identify 80% of sales for the time period per category
2. Sort the products in descending order of sales in each category
3. Create a running total of the product and count the  number of products until the 80% sales threshold is reached
4. User the number in 1 and 3 to create the answer.

Using the superstore data to model this I just can't see where to start. Naturally my real scenario is more complex but I'm starting with a simple case first.

I am sure that this is a common business question but I just can't get my head around it.

I much appreciate any help given. There maybe some clear examples out there but I have not found them so if you can point me in the right direction that would be great to.

Many thanks

• ###### 1. Re: Identifying the percentage of products that make up 80% of your sales?

Simon, what you're describing is commonly referred to as a Pareto chart or Pareto analysis.

Take a look at that video and do a little research on that subject and you should have a clearer picture of what you want to accomplish.

• ###### 2. Re: Identifying the percentage of products that make up 80% of your sales?

Great. Thats the clue I needed.

Thanks for the quick response

• ###### 3. Re: Identifying the percentage of products that make up 80% of your sales?

Glad to hear it.  Keep posting questions - and you will have them!