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XYZ analysis

XYZ analysis is a way to sort products by how steady their demand is, from X for products that sell evenly to Z for products that sell irregularly.

How it works

Take each product’s sales per period, for example month by month over at least a year, and measure how far they swing around their average. That spread, the coefficient of variation, sets the class. X products sell steadily, and Y products swing more, often because of a trend or the season. Z products sell irregularly.

The method comes from materials management and is used in stock planning. Common cut-offs are 25% between X and Y and 50% between Y and Z, but they are a convention and vary by industry.

Paired with ABC analysis, which ranks products by revenue, XYZ analysis gives a nine-cell grid. AX products bring a lot and sell evenly, while CZ products bring little and sell in bursts. ABC-XYZ analysis for e-commerce shows how to use the grid to set ad budgets.

Formula

Coefficient of variation = standard deviation of sales per period ÷ average sales per period

Example

Example store, not client data.

The tableware shop looks at 12 months of units sold and uses the population standard deviation. Dinner plates sold 9 a month for 10 months and none in the other 2: average 7.5, standard deviation 3.35, coefficient 45%, class Y. The Christmas mug set sold 60 in November, 60 in December and none in the other 10: average 10, standard deviation 22.4, coefficient 224%, class Z.

Not to be confused with

  • ABC analysis — ranks products by how much they bring, not by how evenly they sell.
  • Seasonality — a rise and fall that repeats every year. A seasonal product can swing hard and still be predictable.

Right and wrong readings

  • Wrong: “The mug set is Z, so its sales cannot be planned.” Right: the coefficient measures the size of the swings, not their timing. The set’s 224% comes from a peak that returns every November and December. That is why one variant of the method gives seasonal and trend-driven products their own class.
  • Wrong: “Most of our advertised products are Z, so their demand is erratic.” Right: one sale in 13 months always gives a coefficient above 300%. In our study of 1.4 million products, 64.7% of winners were one-offs: one conversion in one month. For them, Z means too little history rather than proven erratic demand.

Sources

  • XYZ-Analyse (German Wikipedia) — classes by regularity of demand, coefficient of variation, at least a year of data, cut-offs of 25% and 50%, the seasonal variant, ABC/XYZ. Checked 2 October 2026.
  • Coefficient of variation (Wikipedia) — standard deviation divided by the mean. Checked 2 October 2026.
  • GetProfit study: 1,404,808 products, 130+ stores, 13 months.