The 5 steps of strategic management (with examples)

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Calculating the sales mix helps your company determine the proportion and variety of products sold or services offered.

It's a crucial exercise that allows you to invest more resources and energy into the most profitable product range and identify lost sales opportunities in different customer segments.

In this article, we'll explain how to easily and accurately calculate, track, and improve your sales mix to achieve higher revenues .

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What is the sales mix ?
For companies with a broad product portfolio, sales mix calculations determine the proportion of each product sold. The sales mix will identify which individual products have the highest profit margins, which generate the lowest percentage profit margins, and whether you sell enough of each to meet your total sales goals.

If a company sells 100 units of Product A and 200 units of Product B, the basic sales mix is ​​33.33% for Product A and 66.67% for Product B. You could also say that the product mix ratio is 1:2.

Companies use sales mix as a tool to maximize profitability and ensure they allocate resources to the right products within their product range.

Suppose you run a B2B business that sells five services. Calculating your sales mix can help you determine:

The net income for each service or product line

The difference between actual sales and sales budget

How variable costs (e.g., raw materials or labor) have affected sales

With this information, you can determine if you're selling gambling data singapore enough of each product or service to achieve your desired sales volumes. You can also adjust your sales strategies, marketing plans , and pricing strategies to identify any discrepancies.

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Why do companies need to know their sales mix ?
A company's sales mix helps it understand which products or departments generate the most profit and whether its sales teams are meeting sales goals .

Every business has a limited amount of time to create, market, and sell products, so making profitable decisions and focusing on the right products can increase unit sales volumes.

Let's say you produce and sell two types of custom office furniture. You're in a competitive market with a small team, so you need to optimize your product positioning matrix.