Low-Margin Business vs. High-Margin | Chron.com

Are you a low-margin business or a high-margin business?

Traditional market wisdom, especially in the offline business world, would have us believe that you can either make money trading high-volume/low-margin OR low-volume/high-margin. An example of each would be a convenience store who turns over a high amount of inventory earning a small profit per sale compared to a luxury car dealership who may sell a very few cars but they have a significant profit margin attached.

The rise of businesses online can increase their net profits by reducing their overheads and making more money for distribution or growth.  Does the impact of easy access to foreign sources of goods, via alibaba.com for example, mean that online entrepreneurs are able to further skew the playing field in their favour by reducing the costs of goods sold and thereby increasing their gross profit margins as well?

Are you an online or offline business and do you follow the traditional methods of sourcing stock or do you see the rise in mini global commerce as a way of competing against bigger business?  Let me know your thoughts.

Low-Margin Business vs. High-Margin | Chron.com.


3 keys to profitability: cost of goods sold, markup, and margin – support

If you don’t know the expected gross profit margin percentage for your business, don’t you think you should? Join an industry association, or search the Internet for more details about expected profit margins in your industry.

Stan Snyder, CPA and expert bean counter gives Microsoft’s Office site an insight into the technical issues from an accountant’s point of view.

Knowing the average gross profit margin for your industry will help you to compare your business to other businesses in your region and remain competitive. Tracking the changes in your actual gross profit over time will help you to price your products to maximize gross profit and net income.

via 3 keys to profitability: cost of goods sold, markup, and margin – support.


Managing the Gross Margin of your Ecommerce Business » Practical Ecommerce

The gross margin calculation of sales minus cost of goods sold is a fundamental key performance indicator of any business that sells products. It measures the profit generated from each product you sell. It is something that many small ecommerce merchants overlook when they focus exclusively on revenue growth or volume.

Dale Traxler takes a look at some fundamentals of ecommerce strategy that we would be wise to note.

via Managing the Gross Margin of your Ecommerce Business » Practical Ecommerce.


Rank by importance – then why for #1 and #3: cost reduction, revenue growth, or margin improvement? – Ask Jeeves

An incomprehensible title(!) but a great conversation between senior industry figures debating which comes first on their list of priorities; increasing revenue, reducing costs or improving margins.

What is your take, which would you put first?

Rank by importance – then why for #1 and #3: cost reduction, revenue growth, or margin improvement? – Ask Jeeves.


Invention Profit Margins and Markups | Entrepreneur.com

What is your ‘Keystone Margin’? A look at the cost of products, markups and margins from a producers point of view.

Knowing the margin that keeps your business ticking, your ‘keystone margin’ you can then approach inventory purchases with this in mind. You will not always be able to meet this figure when you are searching for products to sell, but knowing it and being able to calculate whether you can achieve it when you are presented with a price list, possible in a currency other than your own is vital.

What is your experience? Have you always known whether the products you offer are going to bring you the profit needed to sustain your business? It would be great to hear your stories, let me know via the comments.

Invention Profit Margins and Markups | Entrepreneur.com.


business – Gross Profit Margin And Markup | Entrepreneur.com

A great article from Entrepreneur website explaining how important it is to keep a track on our Gross Profit Margins.

All to often I have to advise that having a healthy markup is not the same as having a profitable business. Knowing how your gross profit margins are tracking will tell you if your business is healthy, booming or in decline.

Now you can track it exactly with Marginalyser.

business – Gross Profit Margin And Markup | Entrepreneur.com.


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