PRODUCT/CUSTOMER PROFITABILITY REVIEW

Overview

Generally, a business’s success is dependent on its sales mix. A sales product profitability matrix will show every product by type and by customer, its costs per unit [materials, labour & overheads] and its selling price per unit. The matrix will show the number of units sold per product. The profit per product will be represented as the unit’s selling price minus the unit’s [material, labour and overheads] costs, multiplied by the number of units sold. The matrix will show each products profit contribution as a % to total profit made. The product/customer profitability review analyses the sales mix, showing in order the most profitable contributors.

What We Do

• An analytical review of the sales mix, by product and customer.
• Investigate the reasons behind the most unprofitable products.
• Encourage the elimination of the most unprofitable products, if significant reduction of costs can’t be achieved.
• Increase prices of low margin products if possible.
• Investigate trading terms of the most unprofitable customers.
• Recommend promotional activity for products with high profit margins but low sales volume.

Your Results

Boardroom Innovations believes that:

• Corrective actions will increase your company‘s overall profitability.
• A far better knowledge of your company‘s profitability should result in improved pricing decision making for promotional activities.