This document discusses the importance of selling with high margins. It states that sales professionals often give discounts falsely believing deals will standardize customers on their products, but these beliefs are seldom true. The document advocates presenting the big picture to sales teams to motivate focusing energy on creating unique value to achieve high margins. A chart is included showing how expenses eat into gross profit and leave actual profit for owners. Industry sectors are listed with typical gross profit, costs of goods sold, selling/admin expenses, and net profit to educate on the impact of strategy on boosting net profits.

1. The reason why you should sell with high margins!
Sales professionals tend to give away discounts under the false pretense of “this is a strategic deal” or “we get this deal and the customer will
standardize on our products/services”. Both statements are seldom true!
I always press on the big picture and present it to sales professionals and managers, so they believe in the importance of a high margin and spend their
energy finding ways to create a
unique value proposition that results
in high margins.
This chart shows the total picture
from the selling price to net income,
with relevant expenses that will eat
up into the gross profit (GP) until we
are left with the actual money that
goes into the pocket of business
owners
You will be surprised how much is
the net profit by business segments.
In the following table I included
some industry sectors with their
typical GP, COGS, SG&A, and net
profit. I hope you find it educational
and hope it will motivate you to
work on your overall strategy
(corporate, product, marketing,
sales, and talent) to come up with
unique value proposition to boost
your net profits.