SELLING LOT OF PRODUCTS/SERVICES, REDUCING THEM WILL HELP YOUR BUSINESS PROFITS
Companies create a variety of products and services so that they can attract more and more audience to their company. This works for the most part but as the time progresses, a large number of products and services can create issues for you. As consumers generally buy only the best offerings of certain companies, most of the products you offer must be left ignored. As you will still have to produce those ignored products, it can cost you a lot of money in the long run.
You might not have noticed, but most of the businesses earn 80% of their profits from just 20% of the products or services they offer. What if businesses are able to identify that 20% profitable process and continue doing them and earn the 80% of the profit? It will certainly be largely beneficial for them and they will be able to reduce the cost of production by a huge margin. Also, it will help them to lower their expenses like raw materials, energy bills, transportation and a lot more.
In order to make this scheme successful, it is important for the businesses to identify the products that are getting them the most profit and then identify the ones that are not doing well in the market.
The following are a few points that will help you to understand why companies should take such measure-
- By cutting down production of non-profitable products and services, you will be saving a lot of money on man power, raw material, cost of processing etc.
- You will then be able to concentrate those saved finances on your profitable aspects which in turn will get you more profit and will facilitate growth for your firm.
- Such moves will attract attention of your existing customers as well as new customers and they will invest in your products a bit more consistently.
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