CBO’s Client Testimonials Series – Increasing Profitability via Increasing Product Gross Margin
CBO helped a client increase his Net Profits by increasing his Gross Margin!
Gross Margin equals Sales less Cost of Sale.
This client is doing Trading business, ie buying and selling of products. Every sale is an indent sale.
This client sources globally, and sells globally to customers worldwide.
CBO ranked all sales invoices by Gross Profits in descending order.
CBO did Activity Based Costing ( ABC ) to also attach Freight, Duties, Warehousing, Transportations and Insurance costs to every shipment sale by IncoTerm. All these Incremental Costs make up part of the Cost of Sale in addition to Purchase Costs of the Products.
CBO also advised the client to do Natural Hedging of currencies – that is, buy and sell in the same currencies to avoid having to suffer Currency Exchanges.
CBO focused the client on the higher Gross Margin Sales by Products, by Customers and by Countries.
As a result of the above exercise, the Client and CBO devised a methodical and awesome Sales strategy which maximized the Sales of higher-Margin Products to higher-margin customers in higher-margin countries which minimized currency exchange exposure!
The overall Net Profits increased 300% in the whole fiscal year after implementation.
The Client remarked “I should have come to CBO earlier! CBO is just marvelous in using numbers to drive my business performances. It’s eye-opening indeed!”
If you need help, feel free to contact us at :
(M) +65 90880669
www.corporatebackoffice.com.sg
