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Analyzing the Profitability of Product Lines

Guest post by: Jesse Hopps

Article Overview: Firms that do not analyze the individual profitability of their product lines risk wasting time and money chasing the wrong opportunities. Salespeople who spend the majority of their time chasing large, low margin sales, close the odd big deal, but do so at a very high opportunity cost. Does this situation sound familiar to you?

Analyzing the Profitability of Product Lines

Analyzing the Profitability of Product Lines

Firms that do not analyze the individual profitability of their product lines risk wasting time and money chasing the wrong opportunities. Salespeople who spend the majority of their time chasing large, low margin sales, close the odd big deal, but do so at a very high opportunity cost. Does this situation sound familiar to you?

Analyze your Product Lines with our Product Profitability Analysis Tool to document and analyze: Product Name, Price, Unit Cost, Unit Sales, Revenues, Costs of Goods Sold, Gross Contribution, Marketing & Sales Costs, Product Profit/Loss, and Gross Margin. Then, view your Product Charts.

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Article Tags: opportunity cost, profitability, salespeople, situation sound, time and money, wasting time



Related Forum Posts
Re: Testing and Tracking Online Marketing Strategies - Hi Jeff, Thanks for posting this. Analyzing is no problem and I do use Google and statcounter for this. I think I fail in the testing step. How do you test. Let's take TEs for example, .- When you promote a squeeze page, I can track the sign ups, but how long do you put it there? - I admit, sometimes I forget a page, and it take a few months before I replace it, how many clicks is a good performance? - Do you use the same page (different code) on several TEs or different pages at the same time? More of this to come...
Business Failures That Boggle The Mind - Did anyone read, a few days ago, about the "popular New York eatery" Serendipity 3, that had to close its doors because it had failed its [i:ur1qdtij]second [/i:ur1qdtij]health inspection in one month. This eatery sells.... or should I say sold... $1,000 hot fudge sundaes and $25,000 sundaes... obviously not on a general basis but there had to have been some clients who paid for them... Lines apparently ran around the block every day... And they weren't making enough money to ensure that their kitchen was kept clean of cockroaches and mice? And after they failed their [i:ur1qdtij]first [/i:ur1qdtij]inspection, they weren't able to pull their socks up in order to pass the second inspection? Talk about incompetence...
Re: What Do You Outsource Mostly? - When building a New Product, I do find it helpful to outsource marketing (articles - blogging - major social network site etc) Otherwise, you may feel bogged down when you should be focused on the overall BIG PICTURE.
Show the Benefits - Offer a free test drive of the Product or Service with a Money Back Guarantee - Take the Risk out. This will help them make the decision but you have to work with them to realize it by explicitly state the benefits they are receiving.
Offer Credit instead - I'm not sure if ChrisH was referring to this but i'll state it more expicitly .. Charge upfront and offer a refund of double the value back in "Credit" towards your Product or Service you have for sale at the end of the event.


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