How to increase profitability of sales

The profitability of sales determines what the value of the specific weight of net profit to revenue from operations of the company. Another name for this indicator – the rate of profit. Increase of profitability of sales is mainly due to factors such as a decline in the cost of goods and increase of its price.

You will need

• Skills in economic analysis, and financial reporting.

Instruction

1. Identify which factors influenced the decrease in profitability of sales of your product. Analyze market sales. See all similar products/services that competitors offer. Due to the fact that the number of manufacturers may vary, highlight the major ones that occupy the most stable positions on the market.
2. Sensitively react to changes, especially innovations to ensure that your goods meet modern standards and are in demand. To achieve this, apply a reasonable, and most importantly, flexible assortment policy for the production and sale of goods/services.
3. Analyze financial activities of the company, which determine what expenses can be reduced. If it is possible to increase the profit and profitability of sales , reduce the cost of production. Just keep in mind that in this case should not be any reduction in revenues. Or increase the price of their goods/services if it will not affect the number of buyers willing to buy it. Lean on the current situation on the market, as well as prices, who are ready to offer competitors.
4. If the company has been producing several kinds of products, determine which ones are most popular on the market. By increasing the specific gravity of the most profitable products in total production going for the implementation, increase the profitability of sales of all goods/services.