Going From Square Inch Analysis to Setting the Number of Pages for Your Catalog
Here's the analysis for catalogers to review page and item profitability. What do you do with the calculation of profitability? I push for a few simple business rules
- If the item or page is unprofitable, why continue it?
- If an item or page is profitable, why take it out of the catalog?
- Keep the profitable items and drop the unprofitable items.
The page count decision should be governed by the numbers. Here are some top-line recommendations:
- More items per page? Putting more items on a page almost always makes sense.
- Will you sell items not in the catalog but only on your website? Typically sales fall off dramatically for items that are web only.
- Should you consider fewer pages? Look at your current sales and profits per page. Are all pages profitable? Are all items profitable? Could you cut out four pages or eight pages without reducing profitable sales? If so, consider pruning out unprofitable pages.
- What are the savings when you go below the 3.3-ounce threshold where postage is fixed. Postage is typically 50 percent to 65 percent of a catalog's cost, so if you go below the 3.3-ounce postage minimum, you don't save on postage. Therefore, your savings are only with printing and paper. (Usually a 52-page catalog is right around the 3.3-ounce weight where you pay the fixed postage minimum.)
A cataloger's basic scorecard is their square inch analysis, which tells how much profit each item and page delivers. Some square inch analysis is meticulously tabulated with the exact amount of catalog pages each item has had over the span of several catalogs. Other analysis is more casual, with less attention to the exact space allocation and the total cost of the page space devoted to each item. Whether the format is rigorous or loose and whether the data is precise or just directional, the underlying purpose of square inch analysis is simple: it tells you whether each item is profitable or not. The issue is simple: Why sell items that aren't profitable?
Are there exceptions to the rule against selling items that aren't profitable? New items and items whose sales are increasing and will soon be profitable are the biggest exception. Sometimes an entire family of products must be sold, and some of the individual items are unprofitable but the entire family is profitable. Some items are seasonal and barely breakeven in the off-season, but are quite profitable in-season. Some seasonal catalogs need to sell in the off-season just to cover their overhead and keep their staff working. However, the general rule of cataloging is to use square inch analysis to determine the profitability of each product and to continually prune the product selection so that only profitable products are offered.