Article 1200

A Penny Saved is 20¢ Earned

The old adage "a penny saved is a penny earned" was on the right track, but like everything else these days, inflation has made the math a little off. Today, the US corporate average net profit after taxes is 5%; which means your company needs to sell $20 worth of your product or service, to realize $1 in net profit after taxes, or to realize the same yield from saving $1.

With the thousands of MRO items purchasing people buy, it's understandable why buys with small per piece savings don't get a lot of attention. Consider this example-the (200 dozen/month) cotton glove user who switched from an 8 ounce canvas glove at $5.50/dozen to the Grey Shadow grey machine knit glove at $2.75/dozen. The $550/month cost savings would be the equivalent of this company realizing annual sales of $132,000!

(The savings equation: $550 savings per month X 12 months = $6,600 annual savings X 20 = the equivalent of $132,000 in sales!)

That's why Magid sales consultants look for every penny's worth of cost savings to improve their customer's bottom line.