How to Determine Appropriate Page Counts

When analyzing the average units sold, we normally see 60 percent to 65 percent of the units sold falling below the average, and 35 percent to 40 percent above the average.

Use square-inch analysis shorted based on price-point ranges to know how the book is assorted. In other words, review price points versus profitability.

If your APS is $31 and your average order value (AOV) is $73.91, the average number of line items per order is 2.38, which could be high for, say, a gift-oriented catalog.

The data also suggests you might be over-assorted at the low end of the price-point scale. This type of analysis should be done to establish product search and selection criteria. The number of merchandise offers (as opposed to the number of SKUs) in a catalog is what drives the revenue. An offer is defined as a product. An SKU could be a different color, size, etc.

Again, look at offers, not items. We like to see a minimum of 250 (300 is even better) different offers in a catalog.

AOV is a function of the lowest-priced items, not the highest price. For example, eliminating items that retail for less than $20 will increase the AOV. What's more, it's difficult to make money on items that retail for less than $20 considering fulfillment costs.

That's why the distribution of offers by price point is important. Also consider that the lifetime value of a low-ticket buyer usually is very poor. They don't tend to be loyal buyers, and the repeat sale factor is low.

Conclusion

Do your homework and take time to do square-inch analysis for every catalog to determine the appropriate page count. Adding pages is a matter of "bottom-up" analysis.

The economics favor adding pages depending on merchandise availability and as long as you maintain the same product density on which your analysis was based.