Driving factors for low revenue
The revenue a business enjoys after meeting up with all expenditures is its profit. Thus by deducting the costs of goods we can realize the profit. Low product profitability is a problem when a product costs more to maintain than the revenue it returns. Bloated operating costs, inadequate income, or both result in low product profitability. Businesses with low-profit margins are vulnerable to sudden or unplanned loss. High-profit margin is a factor in survival strategies. Hyper-competitive industries force companies to adopt low-profit margins as it attracts customers. If the pricing strategy is improper, it affects the revenue. By reducing overhead costs like electricity, rent, salaries, and insurance we can avoid a crisis. Poor market research is also one of the primary reasons for the downfall.
Low Product Profitability
Efficient and thorough root cause analysis helps us identify the genuine causes for low product profitability. This structured root cause analysis template holds the factors that affect the revenue of a product.
Curated from community experience and public sources: