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Sales versus mark-up

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  • Sales versus mark-up

    As per the lesson in our salesmanship class in college, the higher the mark-up on your merchandise, the lower the sales and vice versa. That is one principle that should not be forgotten when you are in the sales and marketing department because sometimes we are carried away by the big number of sales and we seem to be oblivious of the small profit. Actually that is the Chinese style of business to have big sales but small profit. However, that style does not work for everyone. Id say you have to be considerate of the profit that your company could earn from the sales.

  • #2
    I understand that the mark-up is the most important in the business because it is the way to earn profit. If the mark up is not substantial then the profit margin may not be enough to even cover the overhead expenses. But on the contrary, you cannot put too high a mark up because the market prices would dictate the game otherwise you will only lose in the competition. That is one advantage when you are always aware of the prevailing trend in the market.