Net Margin

Let’s say I sell something for a dollar, and make 5 cents net profit after all expenses are paid.

Here’s how I can double my profits – 

Sell twice as much.  That’s a no-brainer – but maybe not so easy.

What if I can lower my cost by 2 cents and raise my price by 3 cents?

Now I make 10 cents instead of 5 cents.  That means I have doubled the total net economic output of my business!

Even if I lose 10% of my customers because they are price-sensitive, I am still way ahead.

Is it that simple?

Ummmm – yes.