February 26, 2018

High turnover or the maximum margin?

October 12, 2013    BusinessРаспечатать эту статью

High turnover or the maximum margin?

Dreams and uncertain financial model can lead to a loss of customer expectations and defocusing business, and as a result – a loss of money.

How much do you think there is a fair way of doing business ? Bender once offered 400 ways of obtaining money , but honest business models , there are only two . The first is to be cheap to buy and expensive to sell in order to get the maximum margin . A striking example is a boutique jewelry , which can be a year to sell one large diamond, get your million and go to the Canary Islands . Typically, the model has a large margin the costs of promotion and marketing , good service. For the consumer, the value of the goods is the right price for it. An important role is played by the brand.

The second model is based on a high turnover where you need to slow to pay debts , but to collect them faster. A good example is the supermarket . Sold a million loaves of bread, make a million and the Canary Islands . Is there a relationship between these two models ? Of course , there is : either you have high turnover , or the minimum margin.

Of course , you should always strive to ensure that both turnover and margins were highest . The point at which the turnover is turnover diamonds loaves of bread called ” orgasm of capitalism.”

Are there many of these businesses do you know? For example, this iPhone. But companies rather the exception. According to the rules , you have to select one item and one item . Dreams and uncertain financial model can lead to a loss of customer expectations and defocusing business, and as a result – a loss of money. But we should not think that such strict rules forbid you to be creative and wants to grow revenue.

Here is an example . Two years ago my family and I went to Stockholm. Take a walk all day on the streets and museums of the city, is coming to the hotel , we decided we wanted to eat. Our hotel was in the center . Who have been in this town knows that is a little patience to get to the Michelin restaurants, but there can be a real pleasure. But the kids did not want to wait . Yes wife was more upset. Having decided that the three hungry women next to me – a lot , we decided to find something nearby. Hearing the Italian speech outside one of the restaurants, we decided to enter into it , because who does not like Italians so finicky eating habits.

The waiters were all brushed and worked very quickly, there were tablecloths on the tables and vases with natural colors , large portions of pasta were very tasty , and the dessert was great at all ! My companion decided that tomorrow we will come here again .

It’s time for lunch. We have come to the same restaurant and saw all spoiled : there was no vases , no flowers, no handsome waiters , and portions of pasta and sauces less than others. And the prices were lower. But in the restaurant, as well as yesterday , a lot of people. It turns out that they are working up to 16:00 on the turnover , and after – on the margins . And at the same time offering a different product ! Everything is different : tablecloths , tables , music , waiters, menu. And the customers know what is going on at this time. This approach seemed to me a very good one.

How to choose the right model? It depends on many factors: the strategic objectives , the value of the goods to the consumer , market , etc. Most of all, the choice affects the businessman . Margin model is more risky than a model of high turnover . First, you can not sell anything at all , and secondly – not to sell the desired amount . Should choose something that you are more willing to build a financial model , and then you can move on and other steps which bring you to the point of ” orgasmic capitalism.”

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