Cheap Doesn't Mean Poor: The Secret to Making Big Money with Affordable Products
Businesses don’t make money only when they sell. They can also make money when they buy
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Introduction
What if I tell you, that there are chances that you can make more money in your business, even if you start selling cheaper?
No, you will not compromise on the quality. You will not indulge in any questionable/ unethical practice. It’s all about knowing how to manage your business better.
Intrigued to know more? Keep reading.
Business 101
Business is all about giving the best possible product/ service to your customer at the most competitive price without compromising on your profitability.
Let’s answer a simple question: What are the two ways of making a profit?
01 - By producing something at a particular cost, and selling at a profit, and
02 - By buying the raw materials at a lower cost, which reduces your production cost and selling your product/ service at a competitive price; compared to all the available alternatives in the market.
Study some of the best businesses in the world (especially in competitive businesses like apparel, retail, consumer goods, etc.) and you will observe this pattern in many businesses across the world.
How else do you think so many supermarkets manage to sell you commodity products like toothpaste at 20% discount over the price on the label?
Businesses that get used to buying their raw materials at the lowest price in the market, will always be extremely difficult to compete with.
Conclusion
Every business has scope to sell their existing products cheaper, without cutting on their profit margins.
Even if you’d like to maintain the same selling price, you can find ways to procure your raw materials/ save on automation/ tech costs by adapting to new age alternatives.
If you’d like to know about tools to save you money every month for your business, I offer 1:1 consultation to select businesses. Interested to know more? Feel free to reach out to me and let’s connect.Your Thoughts!
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Prompt used to create the image for the note
P.S.: Image made on Meta AI using the prompt, “Imagine a business owner buying raw materials from a crowded market full of vendors selling similar products”