The MeritScore is an objective, mathematical index (0–100) reflecting a commercial candidate SKU’s likelihood of achieving sustainable net profitability. Rather than relying on subjective ratings, it computes an evidence-weighted composite score across 6 core operational dimensions.
1. Dimension Weighting Architecture
The algorithm allocates fixed mathematical weights across six dimensions to reflect the primary failure modes of high-growth e-commerce products:
| Dimension | Weight | Focus Area | Key Metric |
|---|---|---|---|
| Unit Economics | 30% | Financial viability & gross margin | Contribution Margin 1 (CM1 >= 65%) |
| Margin Resilience | 25% | Sensitivity to ad auction shocks | CM2 Under +20% CAC Spike (>= 15%) |
| Market Demand | 15% | Organic search intent & growth velocity | Normalized Search Volume & Trend Slope |
| Competition Density | 10% | Market saturation & price wars | Review Count Velocity & Top 3 ASIN Share |
| Operational Friction | 10% | Fulfillment, fragility & return hazards | Return Rate Risk (< 5%) & Dimensional Weight |
| Strategic Alignment | 10% | Brand affinity & cross-sell synergies | Catalog Average Order Value (AOV) Boost |
2. Mathematical Formulation
The composite score is evaluated as the dot product of normalized dimension scores and their respective weights:
export function calculateMeritScore(dimensions: Record<DimensionKey, number>): number {
const WEIGHTS: Record<DimensionKey, number> = {
unitEconomics: 0.30,
marginResilience: 0.25,
marketDemand: 0.15,
competitionDensity: 0.10,
operationalFriction: 0.10,
strategicAlignment: 0.10,
};
let totalScore = 0;
for (const [key, weight] of Object.entries(WEIGHTS)) {
const score = Math.max(0, Math.min(100, dimensions[key as DimensionKey] || 0));
totalScore += score * weight;
}
return Math.round(totalScore);
}3. Brier Skill Score Calibration (<0.15 Target)
To ensure probabilistic rigor, MeritSKU continuously benchmarks predicted product outcomes against actual 90-day store performance using Brier Skill Score calibration.
Our target Brier score is maintained strictly below 0.15 across all SKU categories, ensuring that products predicted to succeed do not encounter unexpected margin collapse.
Empirical Verification Benchmark
4. Verdict Action Thresholds (ADVANCE / CAUTION / REJECT)
Every evaluated SKU is mapped to an action verdict that dictates automated workflow rules:
- ADVANCE (Score 75–100): Clear commercial viability. Qualifies for automated draft generation and test budget allocation.
- CAUTION (Score 50–74): Marginal viability. Requires human intervention to negotiate supplier unit costs or address freight weight.
- REJECT (Score 0–49): Inviable unit economics or extreme fragility. Blocked from store draft creation.
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