The Swiss Chamber of Commerce in The Netherlands can create a business plan for you that peaks profits from each transaction. Contact us for more details.
Here are some important considerations to keep in mind:
1. Pricing strategy. Many companies think they need to undercut their competitors to attract clients. Actually, this strategy is a recipe for failure. If your only appeal is a low price, there will be no reason for customers to come back to you if they find a source that is even cheaper. You will be unable to make the profits you need to stay competative.
Don’t be afraid to charge the highest in the market or to increase your prices if they are too low. Always make sure you offer a better product and/or value to justify your rates.
2. Push high-margin products and services. Calculating and undertanding the margin difference between Product A and Product B is critical for deveeloping your profit plan. The revenues of certain sales may be smaller, but the profit can be much higher.
3. Do not give discounts. Instead, replace the discount with a giveaway that is less expensive, but higher prices than the discount given. For a service store, the giveaway might be an hour or two of a technician’s time. For a hairdresser, it might be a free hair wash. Offers like these help attract clients and close sales without losing too much profit.
4. Cross-sell/upsell high-profit items. Product recommendations are responsible for an average of 10-30% of eCommerce site revenues. There’s no reason why upselling and cross-selling shouldn’t work for you.
5. Reduce your product mix. Many companies have found that offering a diverse product portfolio is essential for maintaining a competitive edge. However, companies often launch product variations without fully understanding the extent to which the variants will increase complexity and costs in the supply chain or be considered valuable by customers. As a result, the avalanche of new products has often generated higher costs without a clear payoff.
The Swiss Chamber of Commerce in The Netherlands creates for you a bluepint for making profit. The key is always to keep the eye on the profit marging. It is not how much you sell, but how much you earn. Keep in mind that when you run out of working capital, you could become bancrupt.