Do you have a volume based or high margin business?
This makes a big difference in choosing what you are selling and how much for. If you are a volume based business you are aiming to sell a lot to as many customers as possible. If you are a high margin business you are selling less but for more profit.
To think about this you can use the example of your average pub and a specialist craft brewery. Your average pub is based on volume. Pubs are often large buildings in central places that are expensive to run. The pub wants to attract as many customers as possible. This pub wants to sell beer of a good quality at a price that average people are willing to pay. This means that they will not sell the highest quality beer as that would be too expensive for people who are just looking for a normal beer. The problem with this is that there are lots of other pubs with the same business model and only a certain amount of potential customers so they need to make sure they are competitive with pricing.
A Craft Brewery on the other hand, is focused on serving premium quality beer at a much higher price. This is likely to be served in a smaller place as there is less customers that will be wanting this beer. The important part being that these few customers will be willing to pay considerably more. If you wanted a standard beer then the first pub is where you would go not the second. In both pubs the customer is paying for what they think is value for money.
These two business models can be looked at in comparison to your own company. Does your company focus on lots of low value customers or fewer premium customers? Many customers focus on growing capacity, offering cheap prices and making what they are doing as simple as possible. However sometimes it is difficult to sustain this model as for most business there is a lot of competition! There are always many highly competitive companies that all want to be the cheapest, this means that the idea of being high margin is sometimes overlooked and customers that want a premium product cant find what they want. Becoming high margin would mean selling less products and selling what you specialise in. This will mean less customers but a higher profit percentage.
The first thing to do when thinking about this is to look at you re existing clients and what they are buying. From this you can look at specialising what you do to make sure you are getting the right mix of quality and quantity. It may be that you need to continue to be competitive and sell lots cheaply or that you would be better selling the best products to people that want quality.
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