Eliminating Zero-Margin and Low-Margin Products and Services
Do you know which of your products and services are profitable and which ones are not?
If you do not know, you better find out. How can you make strategic decisions if you do not know where your money is made?
As an MBA student, I worked on a group project for a distribution company. This company distributed more than 100 different newspapers across the country. We analyzed each of those newspapers independently to assess their financial contribution to the company. We found that only 36 of the more than 100 newspapers were profitable for the distribution company. Only one-third of the products they delivered were profitable. That meant everything else was losing the company ...
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