The profitability of sales determines what is the value of the share of profit in the structure of the company's proceeds. Another name for this indicator is the rate of return. The increase in the profitability of sales is mainly due to such factors as a decrease in the cost of goods, as well as an increase in its price.
It is necessary
Skills in the field of economic analysis, financial reporting
Instructions
Step 1
Identify the factors that have contributed to the decline in your product's ROI. Conduct a market analysis. Check out all similar products / services offered by competitors. Due to the fact that the number of manufacturers may vary, select the main ones that hold the most stable positions in the market.
Step 2
Be sensitive to changes, especially innovations, so that your product meets modern standards and is in demand. To achieve this, apply a well-founded, and most importantly, flexible assortment policy for the production and sale of goods / services.
Step 3
Conduct an analysis of the financial performance of the company, as a result of which you 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 income. Or, increase the prices for the goods / services sold, if this does not affect the number of buyers who want to purchase it. Rely on the current market situation, as well as on the prices that competitors are ready to offer.
Step 4
If the company is engaged in the release of several types of goods, determine which of them is most in demand in the market. By increasing the share of the most profitable products in the total structure of products sold for sale, increase the profitability of sales of all goods / services.
