Understanding the Product Viability Score in ShopStats.ai

Learn how to interpret and utilize the Product Viability Score feature to assess the competitiveness and attractiveness of your products, and understand the rationale behind its calculation method.

1. Accessing the Product Viability Score

• Navigate to a specific product's record page in ShopStats.ai.
• Look for the "Product Viability Score" section on the page.

2. Understanding the Score

The Product Viability Score measures how competitive and attractive a product is based on three main factors:

• Price
• Market density
• Profit margins

A higher score indicates a more competitive and attractive product.

3. Score Components and Rationale

The score is broken down into three main components, each chosen for its critical role in product success:

• Combined Margin Score (50 points max)
  • Gross Margin (25 points max)
  • Net Margin (25 points max)

Rationale: Profit margins are crucial for long-term business sustainability. We give this the highest weight (50 points) because a product needs to be profitable to be viable, regardless of its market position or pricing.

• Market Density Score (25 points max)

Rationale: This metric helps assess the level of competition. A lower market density often indicates a unique product or an underserved niche, which can be advantageous for market positioning and pricing strategies.

• Price Score (25 points max)

Rationale: Price competitiveness is key to attracting customers, but it's balanced against the need for profitability (hence the equal weighting with Market Density). This score helps identify if a product is priced appropriately for its market.

4. Interpreting the Score

• 80 or above: Excellent viability
• 65-79: Good viability
• Below 65: Needs improvement

These thresholds were chosen based on industry benchmarks and internal analysis of successful products.

5. Calculating the Score

To calculate or recalculate the score:

• Click the "Calculate Score" or "Recalculate Score" button in the Product Viability Score section.

6. Viewing Score Details

• Each component of the score is represented by a progress bar.
• Click on a component to expand and view more detailed information.

7. Using the Score for Business Decisions

• Identify products that may need price adjustments.
• Recognize products facing high competition.
• Pinpoint products with suboptimal profit margins.
• Guide product development and marketing strategies.
• Prioritize resources for product improvement or promotion.

8. Accessing Additional Information

• Click the info icon (i) next to "Product Viability Score" to open a dialog with detailed information about the score calculation.

9. Limitations and Considerations

• The score is a guideline, not a definitive measure of success.
• It doesn't account for factors like seasonality, brand loyalty, or emerging market trends.
• Use it in conjunction with other metrics and your business knowledge for best results.

The Product Viability Score is designed to give you a quick, comprehensive view of your product's potential in the market. By considering price competitiveness, market saturation, and profit margins, it provides valuable insights for product strategy and optimization. The calculation method balances these factors to provide a holistic view of a product's market position and financial health.

This score is particularly useful for:

• New product launches: Assess potential viability before full-scale production.
• Product line reviews: Identify which products to focus on or potentially discontinue.
• Competitive analysis: Understand how your products stack up against the market.
• Pricing strategy: Fine-tune your pricing to balance competitiveness and profitability.

If you need help interpreting your Product Viability Scores, strategizing based on the results, or have questions about how to improve them, don't hesitate to contact our support team for assistance.