Profit per sale refers to how much money you actually make whenever you sell something. Remember, so many things need to be taken into account when selling a product. You need a clever pricing strategy to get as much money as possible from each individual sale.
With that in mind, what can you do to increase your profit per sale? Lots of ideas spring to mind, but they often fall under two categories. Today, we’ll look at the two main tactics you can use to earn more money with every sale your business makes:
#1 Reduce the costs of selling the product
Firstly, you should begin by making the product as easy to sell as possible. Essentially, you need to look at all of the outside costs affecting it and find out ways to reduce them. Two key things spring to mind:
- The cost of acquiring the product
- The cost of shipping the product
The cost of acquiring the product basically looks at how much money you pay to actually get the product itself. If you’re buying a pre-made product from a supplier, find ways to lower the price. One idea is to buy products in bulk, which usually reduces the costs. If you are manufacturing the product, you must explore ideas to lower the manufacturing costs. Thus, the product costs less money to make, so it can be sold with a larger profit margin.
The cost of shipping the product often adds unwanted expenses to each sale. You have to pay for the product to be shipped, meaning you must account for this in the sale price. If you want the customer to pay for shipping, the sale price of the product will usually have to come down or the total cost is too much for people to pay. Thankfully, there are easy tactics to lower shipping costs. You can see significant savings on LTL freight shipping, which basically pools your shipment with other shipments in the same truck. This means a full truckload goes out, and all the businesses share the costs.
#2 Sell add-ons and recommendations
Secondly, you can maximize the profit per sale by selling add-ons and recommendations with each product. When someone purchases something, give them a list of add-ons they can also buy. Instead of only buying one thing, they could end up buying two or more, boosting the sale.
Recommendations are also good, showing customers what other people bought when they purchased this item. The two items might not relate to one another, but they could encourage someone to make another purchase. Multiple items being bought in one go will be cheaper for you to ship than one item bought at a time. Therefore, the cost of selling the item is lower for you, and the profit is higher!
By making a few alterations to the pre and post-sale process, you can make significant savings while increasing the value of each order. Thus, your business makes more profit per sale, which will help you become more successful than ever before.