We continue to explore the world of Cost Management and today we are going to see that having a low profit margin can bring a lot of damage to your industry. In this article we will show you the damage that not having this knowledge can cause in your production. Once you are aware of gravity, it is easier to think of a way to seek improvement.
In this article you can check out the video and the complete transcript of the twenty-fifth Dores da Indústria , where we talk about not knowing the Mobile Number List cost of serving customers. We show you how to find a solution for this group of Cost Management pain points .
SEE MORE – How to form the selling price of a product and maximize your factory’s profit
You may not even know how this issue could be affecting your industry. Watch the video below and see how your company may be losing money and how to deal with this pain:
I hope this video has helped open your eyes to this problem, its impacts and also how to solve it. If you liked this material, like, share and leave your comment. Let's create a community of managers and professionals who help and learn together. Participate!
Wait for the next video in the Dores da Indústria series, every Thursday, on the Industrial Blog . While waiting, watch a demonstration of our Industrial ERP and also follow the Production Chat .
See the other videos in the Pains of the industry series
8 common production and purchasing planning problems and the financial impact they cause
5 problems in inventory control that cause financial loss for your industry
Production note: 5 problems that may be taking money from your industry
High selling price: selling for more than I can or need
Low selling price: Selling cheap can be expensive
Why Having Low Profit Margins Can Ruin Your Industry
Having a low profit margin is very challenging, especially in periods of low demand, where you cannot have a substantial sales volume. Without a tool that allows you to manage costs, it is impossible to know the profit margin. From then on, this information revolves around assumptions given by values found in the financial sector, managing by cash flow.
In the Dores da Indústria series , we seek to measure the negative impact that these problems bring. That is, how much money are you losing by having this pain. How much do you lose by having a low profit margin?
Let's think together a way to calculate and maybe you can be inspired and invest in tools and management methods to implement the management of your costs, which can increase your margins.
costs
These are resources that are being consumed. In Cost Management, we allocate costs based on items that we can actually measure, such as raw materials, electricity bills, payroll, rent. These cost items are targeted at what you are looking to cost. Be it a product, company department, distribution channel.
There are several costing objects that you may be interested in finding out more about. The most classic thing is to seek knowledge of the cost of products. With this information it is possible to know which item has a higher or lower margin. Furthermore, you know the why, which goes much deeper, allowing you to take action to improve your margins.
increasing the margin
I invite you to reflect on how much more money you could have in your pocket if you knew what to do to improve your margins. Let's assume your profit margin has 5% and increases to 10%. In fact it will be growing by 100%, doubling your profit.