Operating profit, representing total revenue less cost of production, as well as administrative and selling costs, the company is an important indicator reflecting the effectiveness of the marketing policies of the company, which is especially important for companies-intermediaries.
Reflecting on how to increase the sales profit, the entrepreneur is considering various options, some of which can be extremely risky, and some - overwhelming.The different solution to the problem tend to contradict each other, and we have to stop at some one embodiment.Error in the choice for the entrepreneur can be quite painful and even lead the company into losses.That is why it is so important in deciding to focus not on intuition, but on mathematical calculations and deep analysis of the market.
First we need to consider all the possibilities, allowing potentially increase sales profit, then compare them with each other, considering the expected increase in profits and the level of risk, and only then change the commodity, price or other company policies.
The first and easiest way to increase profits - is to increase the price of products offered by the company.In fact, the price is required to raise to the level of its increase is not reflected in the demand.To determine this threshold may allow polls among customers, or the analysis of pricing policies of competitors, as well as experimenting with prices and discounts for certain groups of goods of the company.However, if the demand for goods falls, even with the growth of prices, this does not mean that profits will fall as an entrepreneur.You need to determine how to reduce the volume, calculate potential losses, and compare it with the additional revenue derived from price increases.
If the analysis shows that to achieve profitable growth by increasing the price does not work, you may be able to do this by reducing the volume of sales.Creating artificial scarcity in certain cases, allow customers to fight for your goods, which will make the price increase is quite natural.However, a more effective way is to increase sales.If you still have customers who are ready to buy products at the current price, it is necessary to throw all efforts to meet this demand, which will guarantee to increase your sales profit.If the price would have reduced the effectiveness of this solution is calculated similar to the analysis of the effect of the price increase.
However, pricing is not the only factor influencing the profit.You can also work with a range of products.Note which products sell best: better and more expensive or less quality and cheap.Depending on this, it is necessary to correct commodity policy.If the buyers are willing to pay for the brand, the increased profits from sales may be putting a high price for a unique branded products.
achieve positive changes in the dynamics of profit can be also reconsidered the marketing policy.Of course, to determine the effectiveness of the advertising campaign is not just pretty, but if you will have enough statistical database, you can determine which products are the favorites, what kind of advertising does not bring the desired effect, etc.For more work in this area can hire specialists.
And finally, the last way to increase profits from sales related to a decrease of tax obligations to the state.Do not forget that the determination of net income, net of tax implies the sum of your gross income, so tax management is no less important than the commodity price or existent policies.At the same time, try to refrain from using illegal or "gray" way to reduce tax payments, which can be fraught with serious troubles and even criminal prosecution.
