What is holding your business back?

You and your team are working hard, extremely hard. You believe you are offering superior products and services but you just aren’t achieving your targeted results. Large corporations have the benefit of utilizing focus groups to provide great insight into all elements of the product, packaging, pricing, etc. to identify potential obstacles to success. Too often small to mid-sized organizations don’t have the resources available within the organization to figure out the issue(s) or if they attempt to identify the problem they look at the situation with a biased perspective.

I recently spoke with the president of a company that manufactures and distributes high quality industrial products. The company saw modest success selling through their authorized retailer network but struggled with their direct to consumer sales. Literally within an hour, the issue became very obvious. The company was offering their product at full retail pricing to consumers through their e-commerce site, and charging a delivery fee often equal to 20% of the retail value. Their authorized retailers were taking orders for the same product offering not only a discount off of MSRP but also free or reduced shipping charges (which was being drop shipped directly from manufacturer’s warehouse to end consumer). For the consumer, the choice was easy, purchasing through the company’s retailer network resulted in a delivered cost that was up to 40% lower than purchasing direct from the manufacturer.

With that knowledge in hand, the manufacturer was able to easily implement changes to their pricing structure and shipping charges. Very soon they found that their direct to consumer business was growing rapidly (with a minimal offset to retailer sales) but their net margin and ultimately net profit grew impressively.

At Pivot Point Management Advisors, we believe that conducting an external review of the sales, marketing and operations with a fresh and unbiased perspective is one of the best ways to identify and address obstacles to achieving your business success.