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Higher Quality,
Not Lower Price,
Is The Secret To
Boosting Profits
by
Pierre John
Jamnicky
A
s a contract apparel screen
printer specializing in the
promotional products industry
for the past nine years, I have
worked with many distributors
and have observed a frequently
repeated mistake: Distributors
sell solely on price.
Too often, I am asked to quote
the lowest possible cost to print
on a garment that meets the
barest minimum requirements.
I fully understand the pressure
distributors are under to be
competitive and get the business.
But I’d like to propose a different
mindset to not only increase their
overall profits, but also greatly
increase customer satisfaction.
The argument for promoting
quality over price is substantiated
by studies in the automotive
industry; namely, which brands
make the most money. In
an
Automotive News
article
published in April 2016, the two
most profitable car manufacturers
in the world had profit margins
of 16 percent (Porsche) and 15.5
percent (Ferrari).
In contrast, Hyundai has a
profit margin of seven percent
and KIA is at 5.2 percent,
according to their annual reports.
So, Hyundai is less than half
and KIA is less than a third as
profitable compared to the high-
end brands.
Walmart, a true giant that
does not specialize in high-end
products or any meaningful
customer service experience,
is operating on 3.1-percent
profit margin.
Apple, a company in the
cutthroat computer industry
where margins are normally in
the low single digits, operates at
23-percent profit. Who would
you rather be: Walmart with $482
billion in sales, $14.7 billion in
Increase Quality To Improve Profits
20
|
JUNE 2017
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