There are a myriad of reasons to raise prices today. inflation. Labor shortage. tax. The ongoing impact of the pandemic. war. Global supply chain problem.
On the surface it might look legitimate: You can’t live without raising prices.
There’s a reason if you look deeper No To: you won‘You can’t survive if you lose customers.
Price increases risk permanent damage to relationships and entire businesses. Doing so opens the door for retail buyers and customers to look elsewhere for similar products or inquire about product needs. This is especially true if you are a supplier of
This is the dilemma facing nearly every business leader today, with many believing they have no choice but to pass on the increments or jeopardize their entire business.
what if you say yes No Should it be one or the other? What if you could not only save money, but grow your business without passing the cost on to your customers?
You can eliminate vendors several times your size while ensuring your major retail partners keep coming back to you for more business. Quality can be maintained. Through periods of inflation and economic downturns, you can come out stronger and poised for growth.
i know it teeth I was able to do that because I’ve led my own company many times over the last 20 years and helped other companies get through it. You can do the same.
This four-part series, P&L Survival Guide, has a clear theme. Take control of what you can control and shape your business. Theoretically clear. It’s actually difficult. We cannot control inflation, pandemics, labor shortages, taxes, wars, or global supply chain problems.So what can do you control
First, you can control your earnings. This is the first important step in getting your P&L in order. Method is as follows.
Sold out.
I’m not going to lower my standards, set predatory prices, or sell my soul. Instead, focus on increasing revenue through sales. The companies with the highest potential for exponential growth, not just to survive the next few years, will sell out.
It’s not easy. Selling out will likely require a change in corporate culture, and may require a change in the entire business model. Discovering and implementing new and different paths to revenue requires initiative across the organization and individual accountability.
5 Ways to Improve Your Topline Earnings without it Price increase:
- Ship All Current Orders – The Easiest Sells Are The Ones You Already Have
- Expansion of existing product range – development of new products for existing customers
- Generate new business – identify new customers, services and revenue streams
- Direct sales – improve margins and consumer engagement
- Check Terms – Renegotiate fares, rebates and program terms
We will ship all current orders. These days, many businesses are faced with the challenge of perfectly shipping orders on time. If you are under-shipping items on your purchase order, focus first on resolving the issue that caused the under-shipment, delay in shipment, or cancellation of the order. The result, in most cases, is chargebacks, fines, and lost sales. Repair. Repair inventory, fill rates and sales losses. Think about it – you already have a sale. Be sure to capture everything.
Expand your existing product range. What if, instead of passing the increased costs onto current customers, they could add more items instead? What additional SKUs could you add to your assortment? New bundles with existing and new SKUs? especially if some of the new items have higher profit margins? Increased revenue may offset much or all of the lost profits due to increased costs that had to be carried over to legacy items. there is. Think of ways to increase your footprint, value and customer impact.
create a new business This is obvious and is where CEOs often start. They try to sell existing products to new customers. Yes, this may be playful, but try to be more creative and open-minded about opportunities. How about expanding from selling products to selling services as well?
As an example, one of our businesses sells self-manufactured products to wholesale, large-scale retail, and D2C channels. Using our fulfillment capabilities in this existing business, we have partnered with other companies that were struggling to effectively run or afford their warehousing, fulfillment and distribution costs. did. The addition of this selling capability not only increased revenue, but created an entirely new business model and increased opportunities for long-term growth.
go directly. Direct-to-consumer sales can withstand price fluctuations much more easily than major retailers. Consider expanding online where you can control pricing and margins. undercut your retail partner. If we can transform a small portion of the market by offering a more intimate brand experience and higher value through D2C, we can improve P&L without alienating our retail partners. It also allows you to build direct connections and relationships with consumers and get the best information about pricing, products and brand communities.
Review the terms. There are also indirect ways to increase your income. Many companies struggle to secure, manage and manage their cargo. Not only is this a significant cost, it is also a liability that can jeopardize your business with large customers. Can I change my vendor contract from Prepaid Freight to FOB Collect? This is also a good place to look at rebates, discounts and benefits. Can these programs be reduced or eliminated while keeping the bill price the same? Retailers give up some margins, but they don’t have to raise shelf prices for consumers, and retail sales there is no risk of losing It’s tricky, but it’s an example of how you can use your creativity to improve your business without passing on increased costs.
These strategies are just the beginning. There are endless opportunities to increase your earnings. There is no need to resort to passing on increased costs as a default. Instead, you can choose to take the initiative, adapt your business, and expand your products and services.
These strategies for increasing revenue are just the beginning. If you’re willing to commit to everything and feel like you need to pass the increased costs onto your larger retail partners, leave it alone. In the next article, we’ll cover another actionable tip for improving his second core element of P&L: reducing cost of goods sold.
