How to Increase Profit Margins Step 2!

I will only say this once!! DO NOT COMPROMISE ON PRICE!

When distributors lack confidence in their products they immediately lower the price, which ultimately effects their bottom line. This comes out of fear of loosing the sale. Everyone figures that some money is better than none. Especially in this economy we have to keep every sale that we have in our hands. But truthfully maybe the sale should be lost if the profit margins cannot be maintained. The problem is when the owner has the mind of a salesman, you need to keep your businessman hat on and not put on your sales hat. It takes time to realize that the bottom line is more important then the top line.

How to Increase Profit Margins Part 1

The ideal gross profit margin for an ad specality distributor is in the range of 38-40% and you have to have that margin to grow your business and sustain your growth. Despite the current economic situation there are distributors that are succeeding and are able to maintain those kinds of margins.

But how do you get to, and maintain that level of profitability in the face of an increaingly price concious cleints?

1. Remember that attitude is everything.

You are not selling yourself or the cheapest item out there, you have to beleive in the product. You have to beleive that the product you are showing, because then the client will believe in the product as well. You have to add value to the transaction.

2. Provide top notch customer service.

One important way to add value is by offering your clients exceptional customer service during each step of the selling process. Price means nothing, as long as you are accessable and the order is completed and delivered without any issues. Keeping profit margins high mean keeping clients happy.

Stay tuned for more ways to increase your profit margins.