How do you analyze product line sales and profitability performance?Please give your best answer.

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marbar57 | Elementary School Teacher | (Level 3) Associate Educator

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One of the best ways to analyze product line sales and profitability is to keep accurate records.  Then, look back over a predetermined amount of time and see what's working and what isn't.  At that point, a decision has to be made as to whether to keep a particular product or line according to how profitable it is.

Many times, a product is a good one, but the way in which it's marketed or advertised is seriously lacking. By changing their marketing strategy, a company can take a poor-selling item and turn it into a money maker. 

Another way to analyze a business's sales and profitability is to compare it to similar companies engaged in their line of business.  There should be an established norm that needs to be met and which can be used to compare performance.  Management should always be open to new ideas and strategies, and encourage new, constructive ways of doing something if the end result is going to be optimal sales performance and increased profitability.


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