Margins

Companies like large margins. If they can make a lot of money per unit sold they just need a few sales to be very profitable.

The problem with this is it’s difficult to make large sales. The customer base is smaller, the time it takes to make a large sale is longer and the risk is greater.

The flip side is to look at smaller margins BUT by having lower prices, the customer base might be much higher, the time it takes to make a sale is shorter and the risk to the buyer is less. The key to working on smaller margins is to get larger quantities sold.

Great fortunes have been made selling lots of small margin items (if you don’t believe me, look at the Walton family).

Large margins are wonderful but be willing to go with smaller margins for more sales which might result in greater profits.

Have a great day!

Lawrence

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