EducationQ&A

Are promotional products buoys or anchors?

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It is important to know what your shop’s overall gross profit margin is. Grab your most recent consolidated income statement (i.e. the profit and loss statement), and calculate your gross margin: simply find the dollar amount of gross profit and divide it by your gross revenues.

If adding promotional products to your mix, at between 30 and 40 percent gross margin, will dilute your already-healthy gross margin of, let’s say, 55 percent or greater, then be careful how heavily you promote and make known that you will entertain a promotional products order. If the sale of promotional products will reap gross margins nearly the same as the rest of your product offerings, then advertise and promote the heck out of them.

-Vince DiCecco, Your Personal Business Trainer

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