Revenue from sales. Ways to increase

Profit from sales, which is the total revenue minus the cost of production, as well as management and commercial expenses, is the most important indicator reflecting the effectiveness of the marketing policy of the company, which is especially important for intermediary enterprises.

Reflecting on how to increase the profit from sales, the entrepreneur considers various options, some of which can be extremely risky, and some - impracticable. At the same time, various solutions to the problem, as a rule, contradict each other, and we have to dwell on any one option. An error in the choice can be quite painful for the entrepreneur and even lead the company to losses. That is why it is so important, taking a decision, to focus not on intuition, but on mathematical calculations and in-depth analysis of the market.

First, you need to consider all the opportunities that potentially increase sales profit, then compare them with each other, assessing the expected profit growth and the level of risk, and only then change the company's product, price or other policies.

The first and simplest way to increase profits is to increase the price of goods offered by the company. In fact, the price must necessarily be raised to the level until its increase does not affect demand. Determine this threshold can allow both polls among buyers or analysis of pricing policies of competitors, and experiments with prices and discounts on certain groups of goods of the company itself. However, if the demand for goods even falls at the same time as the price increases, this does not mean that the entrepreneur's profit will also go down. You need to determine how much the volumes will decrease, calculate the possible loss, and compare it with the additional income received from the price increase.

If the analysis shows that you can not achieve profit growth by increasing the price, you can probably do this by reducing sales. The creation of an artificial shortage will allow buyers in certain cases to fight for your goods, which will make the price increase quite natural. However, a more effective way is to increase sales. If you still have buyers who are ready to buy products at the current price, then you need to give all your efforts to meet this demand, which will ensure your sales profit is guaranteed. If the price has to be reduced, then the effectiveness of such a decision is calculated similarly to the analysis of the effect of price increases.

However, pricing policy is not the only factor affecting profit. You can also work with product assortments. Pay attention to what products are sold best: higher quality and expensive or less quality and cheap. Depending on this, you need to adjust the product policy. If the buyers are willing to pay for the brand, then you can increase the profit from sales by placing a high price for a unique branded product.

To achieve positive changes in the dynamics of profit can also be revised marketing policy. Of course, to determine the effectiveness of an advertising campaign is not easy, but if you have a sufficient statistical base, you will be able to determine which products are favorites, what kind of advertising does not bring the desired effect, etc. For more detailed work in this direction, you can hire specialists.

Finally, the last way to increase profits from sales is associated with a reduction in tax liabilities to the state. Do not forget that the definition of net profit assumes the deduction of taxes from the amount of your gross profit, so tax management is no less important than the commodity or price poltic. In doing so, try to refrain from using illegal or "gray" ways to reduce tax payments, which can be fraught with big troubles and even criminal prosecution.