The basics of business are not monitored well by most business owners. I am talking the basic of basics; cost and margin.
Cost is simply defined as the amount paid to acquire something. Margin simply refers to the difference between the seller’s cost for acquiring products and the selling price.
So you buy something for $100 and sell it for $125, your expenses better be low to live on only the $25, this margin works only if you are selling in volume.
If you buy for $100 and sell for $200 your margin is better and you have $100 to live on.
Volume of sales walks hand and hand with cost and margin. A hundred years ago when I was in college working at Jewel a new cookie product came out. The cookies sold well. Next thing I notice was that the regular price became the sale price. Once off sale ended, there was a cost increase. This increase impacted sales slightly; there were two more increases within 6 to 8 months from initial issuance until final pricing was determined.
Are you monitoring your margins? If you need help give us a call to help you set pricing and determine margins.