How To Increase Your Profit Margin
to 50% or More

This article is designed to show businesses how to make money by offering promotional products to their customers and also to help those already selling promotional products to be more effective.

There are basically 3 ways to make better than 50% profit. While others are cutting their prices trying to be competitive and get business, this report will show you how to make more margin than your competitors and still get the orders. In summary they are:

1.  

Sell at greater than catalog prices.

2.  

Provide other services to your clients in addition to the specialty item and bundle the package together at one price.

3.  

Negotiate EQP pricing from your best vendors providing you with better than catalog pricing.

Do all three and you will position yourself and your services in a way so you cannot be price-shopped because no one else will have the same mix of products and services to compare to yours. Here is some additional explanation of each:

Sell at greater than catalog prices. I'm sure you think I'm crazy and wonder how you do this without your client finding out. It's easy—don't show them the catalog, just a product sample instead! When you determine the best product or two for their promotion, get samples from the supplier and present them to your client with a quote written up on your letterhead for each of the products you are presenting. (See my article on presenting so that you don't have to sell below catalog price). This way your presentation is customized to their needs, avoids direct comparison because they don't have a catalog or catalog page to compare to a competitor, and makes you look more professional by presenting only the products you are recommending and not an entire catalog full of products.

An even easier way to do this is to keep files on supplier specials. When a $2.49 mug has a 3-month special at 99¢, present the mug to your client at $2.49—you can even show the catalog page then if you want because your cost will be based on the sale price and you will be selling based on the list! Even if the normal price is on an "A" and the sale price is on a "C," your cost would have been $1.25 ($2.49 on an "A") and now it's only 60¢ (99¢ on a "C"). Sell at the $2.49 and your profit is 75.9%! (If you want an easy way to find out supplier specials, The Quick Technologies SAGE system search engine allows you to search for supplier specials on any given product category! While you have to qualify to buy SAGE, we have arranged with QTI that if you come through us, you are considered qualified. You pay the same price either way—contact me for more details).

Provide other services to your clients in addition to the specialty item and bundle the package together at one price. This is a classic marketing technique you don't see in our industry very often. An example is fulfillment programs. The companies who provide them add the product costs together with the fulfillment costs and bundle it as one program. Though you will just make your normal profit margins selling prepackaged fulfillment programs, there are things you can do yourself.

The biggest benefit of doing this is not just increasing your profit margin, it is making yourself indispensable to your client, providing them better service than they have experienced before, and eliminating any possibility of comparing you on price to your competitors. Some pretty nice benefits, don't you think?

Here are some examples of services to bundle along with the promotional product.

Logo design, slogan design, jingle creation, and other artwork—see the 1800mylogo site to get any of this done for $300 or less and you resell to your client for a lot more.

Set up tracking for their ads and promotions. Help them determine how to do this and provide the system to do it and administer it for them and provide management reports. You can have their personnel implement it and you just work with their people and provide the data to your client. If you need help on how to do it, read the other free reports on this site for examples. If you do this for them, it sure makes it easier to get reorders later when the promotion works!

Handle the distribution of the promotional item for them. If they have a mailing list, arrange for a lettershop to do the bulk mail and distribution and mark up their services. Find lettershops in your local yellow pages under "lettershops", "mailing services" or "direct mail services". Your client may not know how to do this, and if you help make it happen they may be very happy to pay you for those services as well. I recommend bundling whatever group of services you offer together as a unit and giving them one price for the entire program!

Negotiate EQP pricing from your best vendors providing you with better than catalog pricing. This one is great and will assure you better profit margins on every order! You need to wait until you have begun doing business with some suppliers first, and I recommend waiting to try this until you have given a supplier at least 3 orders.

Be aware that suppliers give their good customers end quantity pricing deals all the time and you can get these deals too—you just have to ask for it the right way. Here's the procedure:

1. 

Determine how much business you are giving a supplier. If you have not done business with them for a year yet, take the last 6 months and double it for your annual forecast. Make sure you have given them a reasonable amount of business before approaching them.

2. 

Call the supplier and explain you are giving them most, if not all your business in the product category they sell. Tell them you appreciate the good job they have done for you and your clients. Then, mention that you are having a bit of a problem that you would like to discuss before it becomes a bigger problem. This should get their attention.

3. 

Explain that in some cases, you are getting hurt on margins by other distributors selling other lines. Ask if they have done end quantity pricing deals with other customers. Odds are they have and when they say so, ask how long it would take to get it set up for you and ask if it can be in place in time for your next order.

4. 

If they say they haven't done it before, explain what you are asking for is end quantity pricing from their catalog regardless of the quantity ordered. If they cannot do it for you, ask if they can give you a 10% discount on your orders, free set ups, or some other concession to help you out.

5. 

If they do not offer to do anything, consider switching suppliers to one who will and contact their primary competitors and go through the process with them. Since you will not have done business with them yet, explain you are giving all your business to the other company and will give it all to them if they work with you.

Do this with all the suppliers you do a reasonable volume with and your profit margins will be substantially better for your company as a whole!

For More Information Contact:

Joe McVoy
Profitable Marketing Systems, LLC
1100 Nautilus Court
Lafayette, CO 80026
Web: www.ProfitableMarketingSystems.com
Email: Joe@ProfitableMarketingSystems.com
Phone: (720) 890-8760
Fax: (303) 604-6839

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© 2006 Profitable Marketing Systems, LLC