Archive note: This post marks one of Ordoro’s earliest contributions to an eCommerce industry publication. In February 2010, Ordoro published an article with Practical eCommerce about using the 80/20 rule for inventory management more effectively.
Our first guest article appeared in Practical eCommerce in February 2010. Titled “Inventory Management: Use the 80-20 Rule,” the article explored how merchants could focus their attention on the products that contributed the most to sales and profitability.
The central idea was simple: not every product deserves the same amount of inventory investment or management attention. By identifying the items that drive the greatest share of business results, merchants can make more informed purchasing and stocking decisions.
The article discussed several inventory management principles, including:
- Applying the 80/20 rule to inventory
- Identifying high-value products
- Setting different service levels for different product groups
- Reviewing inventory performance regularly
- Avoiding the assumption that every SKU should be managed the same way
Those principles remain relevant today. Growing eCommerce businesses still need to understand which products sell consistently, which items tie up cash, and where inventory shortages create the greatest risk.
How the 80/20 Rule Applies to Inventory
The 80/20 rule suggests that a relatively small group of products may generate a large share of a business’s sales or profit.
Merchants can use this idea to identify the products that need the closest attention. High-performing items may require more frequent stock reviews, stronger supplier relationships, and carefully planned reorder points. Slower-moving products may need smaller purchase orders, fewer replenishments, or a different sales strategy.
The exact percentages will not be the same for every business. The value comes from reviewing product performance and managing inventory according to its importance rather than treating every SKU equally.
Better Inventory Decisions Start With Better Visibility
Applying the 80/20 rule becomes easier when merchants can see current stock levels, sales activity, incoming purchase orders, and inventory across every sales channel.
Ordoro’s inventory management tools help eCommerce businesses track stock, manage purchasing, set low-stock thresholds, create kits, and synchronize inventory across channels. Learn More About Ordoro Inventory Management
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