Turn-Over Vs Profit Margin

Photo credit: University of Virginia





By Okechukwu Okugo

Business is turn-over. It is not about profit margin. If you sell only one goat in a week for 100 rands and a profit of 50 rands, can you compare with someone who sold 100 goats a week with a profit margin of 20 rands?

No.

If you sell 100 goats with a profit of 20 rands each, you got a profit of 2000 rands.

Someone sold only one goat a week with a profit margin of 50 rands for one, 50 rands is the person's only profit.

Mass production enriches a company by increasing turn-over and reducing profit margin. It makes the production of a single product or item far cheaper and increasing the ability to supply more of the products within a time period. 

So concentrate on turnover. The number of your products you can sell. Don't concentrate on profit margin.