The Importance of Product Mix

Has your Gross Margin declined but your sales / revenue remained constant?  If the answer is Yes, then a good Business Advisor will have the answers to help you get back on track. 

Product Mix

It is a fair guideline to state that approximately 50% of businesses are unaware of movements in their product mix

The main issue here is that businesses are unaware of changes to their sales / revenue line and so don’t take the required actions to manage these changes.  This can result in a combination of:

  • Reduced Gross Margin if a high margin product drops in popularity.
  • Not taking corrective action to improve the product mix.
  • Reduced cashflow from not reducing material order and inventory levels for the declining items.
  • Running out of stock of increasing product lines.
  • Falling behind competitor innovations.

If you want to stay on top, then you need to know what is happening in the marketplace and how it is affecting your sales / revenue lines

Business Advisors can add significant additional Gross Profit to businesses of all sizes and in every type of industry, by identifying the reasons for, and then applying the remedies to correct the issueProduct mix changes can occur from:

  • Actions you have taken to increase another specific sales / revenue line.
  • Improved competitor marketing.
  • Competitor innovation.
  • A better alternative solution has become available on the market.

You need to be aware of the impacts of both your own and competitor initiatives on the market.