Are your products profitable enough?
This is a question that every business needs to ask themselves. If you're not making money from your products, then you need to find a way to make them more profitable.
I previously wrote an article about how your business is the boat and the overheads are like the boat's hull. The boat’s hull needs to be light in order to keep the business afloat. In this article, I wrote about why it's important to keep your overheads low, and how you can do so without sacrificing quality or service.
If you think of your business as a boat, then it's going to need an engine. And the engine needs to be powerful so it can give the boat enough thrust to move forward. It also needs to be efficient so you don't use up too much fuel too quickly.
In this article, we'll talk about how your products are your boat's engine and how you can keep your engine running smoothly.
Your product is what's going to drive your business forward. Your products need to be very worthwhile for you to make and sell. And you need to make sure that your products are profitable enough to justify their existence. Otherwise, you'll find yourself in a situation where you can't save the product or the business. And that's not a position you want to be in.
So how do you make sure your products are profitable enough?
It starts with understanding your costs and your margins. Consider shipping costs, packaging costs, order fulfilment costs, advertising costs, commissions, marketplace fees, website provider fees, etc.
If you don't factor these things in, then you might find that your products are selling but you're not making any money. Once you have a handle on your costs and margins, you can start to price your products accordingly. And you can also start to look for ways to reduce your costs so you can increase your margins.
Can you create digital products to complement your physical products?
Digital products have almost no production costs and are easy to implement. This could be an ebook, a subscription service, a course or a membership, which you only need to create once. Can you create a service or digital product to complement your physical products?
If you find that your products aren't selling at the prices you need them to, then it's time to go back to the drawing board.
Don't let yourself get in a situation where you're struggling to keep your head above water. Make sure your products are profitable enough to keep your business afloat. It's the only way to ensure long-term success. You have to be willing to kill low-profit, low-demand, high-overhead products.
So my tip for you is to check that your products are in demand and profitable enough and if they're not, reposition or kill it.