Correct?! I believe you don't have to be smart to understand this. So, by manipulating or play around with [SALES PRICE], [QUANTITY] and [MARGIN] you can change the outcome of your PROFIT. Again, it doesn't take a genius to figure that out either. So, let's ask ourselves, which of the three areas you can play around? And how you can maintain or increase your profit by manipulating these three areas?
I'm 'on' a logistics business. Allow me to share with you how I control my profit to outbeat my competitors in the market - I play around all three areas.
- Lowering my operating cost to increase my MARGIN (This is our trade secret which I won't reveal too much. But in a nutshell, we simplify our business model in such a way that even a high school drop-out can handle it well and that alone has saved us alot in overhead. But one of our biggest advantage is that we have paid off 90% of our assets. Lately we look forward to offering FREE advertising space on all our trucks to a tyre manufacturer and hopefully get some discounted tyres from them to further saving our cost, anyone has good TYRE MANUFACTURER, please contact me :)
- Increasing QUANTITY of sales. That is similar to how McDonald increases 10% of their sales by simply asking customers to supersize their meals. Increasing new clients are always not easy for us, so the immediate action we take is to offer add-on services to the existing clients, such as local despatch services which is at least 20% cheaper than the local courier services.
- Maintain SALES PRICE as much as possible even though the diesel price shoots up. Since we have managed to control [MARGIN] and [QUANTITY], we have rooms to adjust the [SALES PRICE] to attract more customers.
As I always mention to my business associates that I know nothing better than any transporter out there, but I am so damned good in saving cost for my customers. Even though I personally only focus on land transportation, I can help you to source out the most cost effective logistics provider from forwarding, warehousing, express services, down to dispatch services.
