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THE POWER OF COST IN SALES GENERATION.

Not every small business operators will tend to understand the effect of cost on sales. In other words, understanding the relationship between cost and sales in your business assures, you are on your way to make enormousness wealth. In business, cost and sales have a direct proportionality; high cost equals low sales when every other cost determinant remain the same.

While price is not the only determinant of sales, yet is constitute over 40% of sales generation, quality/services of the product can also count on it’s sales. High quality products can sell very well while good service delivery can boost sales. This case is vise versa to a low quality and bad service delivery.

When considering reducing the cost of your product in other to draw more sales, you should also know that cost reduction can lead to low sales. This occurs when some of your prospects had develop the mindset that ”low priced products are low quality products” Therefore, what is expected of you here is to undergo price research to make sure you keep a comfortable price to your prospects.

Below is a good way to keep to tag a good price to your products;

  1. Ask your client the best price of the product before considering it’s invention or production.

  2. Price your competitors to know how much they make their sales of the same or equivalent products.

  3. Cut the chain of greed in business, as this can cause you to tag the price of your product high- whereas you find no buyers in your business.

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This entry was posted on Sunday, May 31st, 2009 at 1:56 pm and is filed under Sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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