How to Increase Business Profits – Buying and Selling
- October 13, 2021
- Posted by: Sadaf Mojza
- Categories: Business Consulting, Business plans, Business Troubleshooting, Competitive research, Finance & accounting, Innovation
In the previous blog of our Increasing Business Profits series, we discussed How to Increase Business Profits – Buying and Selling . In this blog, we have simplified ways for increasing business profits by paying more attention to how you are buying and selling in your business. A lot of businesses involve both buying (raw material, resources, labor) and selling (goods and services for a profit). One sure fire way of increasing your business profits is to pay attention to this buying and selling, and cut expenses in the processes wherever and however possible.
Increase Business Profits through your Buying and Selling
Increasing Profits Through Your Business Offer
How to Increase Business Profits, is the question in discussion everywhere in the business world. Carefully consider what you are offering to your clients and for how much. Reconsider.
Pricing your product
Make sure you are regularly reviewing how the product and services you are offering to your clients being priced. There are going to be countless variables involved, so keep them in mind, and increase or lower your prices accordingly. At times, you’ll be able to raise product prices without your sales taking a hit – take that opportunity. Similarly, for some situations, you might have to lower your pricing a bit or offer discounts. Keep all options open.
Finding the best clients
There are different kinds of customers. Your main job is to focus on the most profitable ones. A profitable customer brings you good profits (of course), but also returns for more transactions, and is a source of market goodwill for you. Your best customers will be long-term clients and it’s always a good idea to invest in them.
The Pareto Principle
The Pareto Principle or the 80/20 Principle suggests that around 80% of the profit you make will be from around 20% of your clients. You can start increasing business profits by holding onto profitable and long-term clients, even if it means letting go of some of the less profitable ones.
Cutting Costs – Buying Effectively
A good practice in increasing overall business profits is to continuously keep reviewing the sellers you get your raw material and other services from. See if you can bargain, or buy material in bulk to save up on unnecessary expenses that may arise. Increasing business profit depends highly on your ability to manage expenses.
Getting the best deal
Are your vendors giving you good deals? Are there other suppliers offering better prices, or better quality? It’s always a good idea to keep an eye on the market in case you are getting an unfair price. If you are a long-term customer of your vendor and are valued as a client, use that as leverage to get fair prices. Make sure you are getting the best value for your money. After all, it impacts your entire production cost and also the quality of the products you deliver to your clients.
Share your feedback with us about increasing productivity through buying and selling, leave a comment, or contact us. For more elaborate and specific business development related consultation, reach out to us here.
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