What is the 80/20 rule for inventory?

The 80/20 rule for inventory says roughly 80% of your revenue comes from about 20% of your SKUs — so a small slice of your catalog deserves most of your attention. It's a rule of thumb (real ratios vary: 70/30, 90/10), but the skew itself shows up in almost every product business, and it genuinely works as a prioritization lens.

Acting on it is where value appears: identify your top-selling ~20% (the 'A items'), give them tighter safety stock, more frequent counts and first claim on cash; let slow C items run leaner, ordered less often, and reviewed for discontinuation. That's the essence of ABC analysis — the 80/20 rule turned into an operating routine.

One warning: 'low revenue' isn't 'unimportant' — a cheap part that halts sales of an A item when missing is an A item in disguise.