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High volume v high margin

You can see more about my company at www.osamcquillan.ie or if you want to make an appointment to see me you can phone +353 1 283 4123.

Most business sell a variety of products and services.  Some businesses know their overall margins, so an electrical wholesaler may say that his margin is 20%.

 

Within this there may be wide variations – thinking about the electrical wholesaler, some instrumentation may have margins as high as 40% but other goods such as cables may be as low as 15%.  Customers may come for the low margins goods, like petrol in a petrol station, but the station makes very little profit on petrol.  So what does the petrol station do?  It does everything in it’s power to sell high margin items to people who come in for petrol.

 

So figure out what your lower margin goods and services are, and try to get customers who buy those already to start buying higher margin items from you too.  You can assume that they are going to buy the lower margin items from you, so the time you spent promoting these items has to drop and you need to spend more time promoting higher value items.

 

A printer may look at selling a large volume of low-margin print, such as headed notepaper.  This is an item that is easily comparable as between printers, and so a customer can shop around for a better price.  The end result is that the printer has to take a lower price on headed notepaper.  However the same customer may not be able to shop around for an unusual print piece such as a wired calendar, so the printer needs to ensure that he gets a good margin on the unusual items sold by him.

You can see more about my company at www.osamcquillan.ie or if you want to make an appointment to see me you can phone +353 1 283 4123.