Reduce your Costs by 10% "A Few Notes about Reducing Overheads" If you increase
your sales then you should make more profit. But did you know how much your profit increases? Let me give
you an example. Let's assume
that you buy 'widgets' at £20 and sell them for £30. So, your Sales Turnover is (40 x £30) = £1200 Turnover. Your costs are (40 x £20) for the widgets + £300 advertising = £1100 costs Thus, Your NET Profit is (Revenue - Costs) = £100 Profit. I know this is simplistic and doesn't take into consideration VAT, fixed costs such as wages etc but please bear with me for now - it helps to illustrate a point. Now, let's see what happens when you REDUCE your Marketing costs by just 10% whilst maintaining the same amount of sales. This means
that instead of £300, your marketing has cost you £270 Your Costs
are now (£20 x 40) + £270 = £1070 Costs This is GREAT because it means that it's 30% more than £100 which it was last time. i.e. Shaving your Marketing Costs by 10% Boosts your PROFIT by 30% I'm fairly
confident that when you know how to apply some of the techniques that
we teach here at MKLINK, you can reduce your marketing costs by more than This isn't unrealistic however, as when you look at increasing your website's conversion rate (which very few people bother to do) then essentially, you get more customers for the same cost. Effectively, this has the effect of making your marketing cost less for the same result. However,
let's see what happens when you reduce your marketing costs by just 10%(Which
you should be able to do if you've listened to my lectures on Web Analytics) NEW sales
revenue is 44 Widgets @ £30 each = £1320 Remember
the original profit was just £100... Let's
be honest, 10% can't be THAT hard to achieve! If you'd like to know how to do this or indeed any more information about your internet marketing, then checkout my training system at http://www.mklink.com/training/ Final
thoughts. Mike
Knight. |