I have two separate products for sale and product A generates a profit margin of 60% which is $2 profit per unit versus product B that generates a profit margin of 40% which is $4 profit per unit. Product B experiences lower profit margin percentages due to the higher sales price.

What considerations should I take into account to determine which product to prioritize selling when I have a capacity constraint?

  • root_wedgie@alien.topBEnglish
    1·
    1 year ago

    With the limited info you have shared, it’s very hard to recommend which product to prioritize. But these should be your guiding principles:

    • Prioritize the product that is more scalable (more volume)
    • Prioritize the product that will give you greater marketshare in the respective market
    • Prioritize the product that is more aligned with your brand & its mission
    • If the two products are related:
      • If a particular product is a gateway to other products, offer that at a discount. e.g., if you sell garden pots and fertilizer, think of selling the pot at a discount since it will probably be a one time purchase while markup the fertilizer since it may be a recurring purchase
      • Bundling is also an option

    Also, think of today’s profit margins as something that is true today. It can always change due changes in raw material costs, supply chains, your pricing power

    Hope this helps. Good luck!