Should I push my highest-margin product or my best seller?
Total profit equals profit per piece times pieces sold, so compare both products on that number and see what a few extra sales of the high-margin item would add.
Every small shop eventually has two kinds of products. One brings a lot of profit per piece but sells slowly. The other sells all the time but leaves little behind. When you only have so much energy for posting, ads and packing, which one deserves your push?
Look at total profit, not just margin
Take two items from a candle shop.
- Item A is a large scented candle. You earn Rs 100 profit per piece and sell 10 a month. Total profit is Rs 1,000.
- Item B is a small tea light pack. You earn Rs 40 per pack and sell 40 a month. Total profit is Rs 1,600.
B is your best seller and brings the larger monthly profit. A has the better profit per piece, which is why it feels like the one to promote. Neither number alone tells you what to do. What matters is how much each extra sale of each product can add, and how easily you can get that sale.
What if A sells twice as much
Suppose you give A a bit more attention. Better photos, a pinned post, a small mention in every parcel. Sales rise from 10 to 20.
- A now earns 20 times Rs 100, which is Rs 2,000.
- B stays at Rs 1,600.
- Together they earn Rs 3,600, up from Rs 2,600.
Ten more sales of A added Rs 1,000. To get the same Rs 1,000 from B you would need 25 more packs. Whichever item is cheaper to sell an extra unit of is the better one to push. Ten extra candles may be easier to find than twenty five extra tea light packs, or the opposite, depending on your customers.
Questions to ask before you choose
- How hard is the next sale? A is a Rs 800 item for people looking for a gift. B is a cheap add on. Different audiences, different effort.
- Does B bring people in? A best seller often introduces new customers who then try other things. If B is your doorway, do not starve it.
- Does A sit in stock? A high-margin item that moves slowly ties up cash. inventory-turnover-for-small-store shows how to check.
- Do the two sell together? If many customers buy a tea light pack with a large candle, a bundle might lift both. bundle-price-vs-separate-price-profit gives the maths.
A balanced approach
You do not need to pick one forever. A practical split is:
- Keep the best seller visible and always in stock. It pays the bills and brings in new buyers.
- Pick one high-margin product as your push of the month. Feature it first on your homepage and in your posts.
- After a month, compare total profit for both products and decide whether the push worked.
Do not push a product just because its margin percentage is high. A 60 percent margin on a product that sells two a month contributes very little. Equally, do not ignore margin completely. A product you sell a lot of at a tiny profit may be working you hard for little reward.
If you are deciding how many products to carry in the first place, see the-case-for-a-smaller-catalogue. To judge whether a price rise on the slow seller could help, use simple-price-elasticity-check-for-sellers.
A one-minute check
For each product write: profit per piece, pieces sold last month, total profit. Then ask what extra effort would give you ten more sales of each. The product with the larger gain from ten extra sales is your push.