Measuring Profitability Through Square-Inch Analysis: An Updated Approach

Catalogs are a simple business. If the list segments you mail and each item of merchandise you sell are above breakeven, your business should prove profitable. Draw the line at lists and merchandise that aren’t profitable. Setting the number of pages in your catalog involves allocating enough real estate to those profitable products. The number of pages should flow from the amount of space needed to merchandise all the profitable items. The steps are simple:
* choose either a rigorous or relaxed square-inch analysis of product;
* sort your product categories into the number of pages needed for each category; and
* prune the weak categories, and increase the merchandise in your best categories.