How to increase your return on sales
Return on sales determines what is the proportion of profit in the revenue from the activities of the company. Another name for this indicator is the rate of return. The increase in sales profitability is mainly due to factors such as a decrease in the cost of goods, as well as an increase in its price.
You will need
Skills in the field of economic analysis, financial reporting.
Instruction manual
1
Identify the factors that contributed to the decrease in the profitability of sales of your product. Carry out a market analysis. Check out all of the similar products / services that competitors offer. Due to the fact that the number of manufacturers may vary, highlight the main ones that occupy the most stable positions in the market.
2
Be responsive to changes, especially innovations, so that your product meets modern standards and is in demand. To achieve this, apply a reasonable, and most importantly, flexible assortment policy for the production and sale of goods / services.
3
Perform an analysis of the financial activities of the company, as a result of which determine which items of expenditure can be reduced. If possible, reduce the cost of production to increase profits and profitability of sales. Just keep in mind that in this case there should not be a decrease in sales revenue. Or increase the prices of goods / services sold, if this does not affect the number of customers who want to purchase it. Rely on the current market situation, as well as the prices that competitors are ready to offer.
4
If the company produces several types of goods, determine which one is most in demand on the market. By increasing the share of the most profitable products in the overall structure of products for sale, increase the profitability of sales of all goods / services.
Useful advice
Analyze the profitability of sales on an ongoing basis, monitoring the level of costs, as well as the volume of sales of goods / services.
