Sunday, July 4, 2010

Which is better, Low-Margin High-Volume or High-Margin Low-Volume?

The above question is faced by most small business entrepreneurs in choosing a business concept to go into. There is a tendency to choose the low-margin high-volume because it may also mean lower capital outlays.

Jewelry is high-margin but low=volume. Some processed foods are low-margin but high=volume. Is it worth the effort to do the latter?

Some say that as a small business entrepreneur, we have limited everything: time, money, resources, manpower and therefore, we should aim for the high-margin low=volume route to maximize what we have.

Please give me your comments on this. Thank you.

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