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Selling at cost price to avoid total loss?

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  • Selling at cost price to avoid total loss?

    Every business owner have the sole objective of making profit by maximizing its sales of products and services. But there are some occasional situations where the possibility of meeting the initial business goal of making profit won't be feasible and what matters most at that point in time would be to save cost or capital invested in the business. Take for instance, dealing with sales of perishable products, there is always a time frame to have all items sold off or risk losing them to getting spoiled or damaged, in such occasions, selling at the cost of production looks like a good business plan.

  • #2
    It happened to me before when I had my business of clothing and personal accessories that I had to sell some items that were going out of style. Especially the young ones, they are after the trendy wear so that a popular style last year would not be patronized anymore. Before a product goes out of style, I had to sell it at a much lower price and not only at cost but sometimes even lower than the cost. It really pays when you are aware of the trends because that can help the business regarding the news products that are coming into the market.


    • #3
      When you are starting a business, it is traditional to be ready with discounts and giveaways especially in the first few months of operations. That is one way of reaching out to prospective customers so that you can somehow establish goodwill when they buy. But when the business is doing good and there are products that are nearing the expiration date then holding a sale will not harm you. Big stores are holding sales twice a year or even more often because they want to discard of old stocks.