The first step is to admit you haven’t done a true Margin Analysis… Part 2 of a recent conversation with Halden Group’s Michael Kristensen, Jr.
September 24, 2019 9:23 pm
RD: Margin analysis. Your thoughts?…MHK: “A lot of emerging, as well as legacy companies tend to give make-shift talking points about what their product margins might be – should be – hope to be. Just watch a few episodes of Shark Tank and you will see multiple examples of this sort of improvised ‘margin-make-believe
The sad truth is that most businesses don’t have a real grasp as to what their actual margins are. In fact, because they may be profitable, they neglect to do a deep dive into what percentage of margin they should apply to their product line. Margin Analysis is to a business, is what an annual medical check-up is to the body, so procrastination isn’t doing your bottom line any favors.
An important component within margin analysis is Landed Cost. Most companies know that they pay X dollars for a product. Where they often lose margin is the extra costs of acquiring that product in freight and handling charges from 3rd party logistics vendors, distributors, etc.
Margin Analysis is one thing I love about what I do at Halden Group. It’s very satisfying to work with a client to analyze, develop, and implement a more disciplined and automated approach to tracking landed costs, COGS (Cost of Goods Sold), product margins and more
We will be posting more conversations from Michael, Jr. as well as other Halden Group leaders soon, so stay in “the know” by following follow Halden Group on Twitter, LinkedIn, Facebook and Instagram.
