Entrepreneurship Profit from the aftersale Business Model Innovation

Former BBC Dragon and Scottish Sun Columnist Shaf Rasul looks at why In some Business models profit is made after the sale and what we can learn from them. #askshaf #dragonsden #Entrepreneurship Please subscribe to Shaf’s Channel. https://www.youtube.com/channel/UCViU... AFTER SALE PROFITS You’ve built up your rapport with the customer, you’ve sold them your product or service and worked out your profit margin on that sale. So, what’s next? Surely …. you move on to the next customer, that has to be the correct answer? Well, not quite. Today’s Ask Shaf is about additional profit – profits that come from the after sale. Let’s go back and find out about a pioneer of this type of selling. Ever heard of King Camp Gillette? Yip, Gillette razors. He revolutionized shaving when he realized that instead of having a thick blade that had to be regularly sharpened – a laborious process – disposable, safe, inexpensive thin blades would be great for business. He was granted a patent in 1904 and overcame initial public skepticism by giving away the razor handles. Men threw away the blades and bought replacements. This was a stroke of genius. Selling an item at a low price – or even giving it away for free – to increase sales of a complementary good is a great business idea. Profits from the after sale can be a huge boost for your firm. Fast forward and this is common today. Look at standard inkjet printers. They are as cheap as chips. But canny retailers not only sell you the printer, they can sell you extended warranties. You get peace of mind and they get another sale. What else do you need for that printer? Ink, of course. Once the ink runs out, you have to buy more. Another after sales profit for the retailer. Car sales people are experts at making profit from the after sale. You’ve bought your beautiful new motor but it doesn’t end there. Before you drive off, service plans alloy wheel protection have all been offered, and often, purchased. If you’ve been really clever, you could negotiate a reduction on the price of the car if you take up these additional offers. It’s not just huge multinationals that work this way. A bike shop owner doesn’t just sell bikes, they would hope to make profits from the after sale too. They’ll stock helmets, lights, bells and possibly do servicing and repairs. All opportunities to add to their profit. If a business has covered its fixed cost, then everything else is profit. Core business often covers costs and a handsome profit can be made from the add-ons. Have a think about where you can squeeze profit from add-ons to your business. You might need to take some inspiration from Mr Gillette and think outside the box, but if you are really sharp, you’ll cut through the bad ideas and think of a winner. Let me know your thoughts. Did you enjoy this video please check out my other 7 hacks videos. https://www.youtube.com/playlist?list... Social Media: Reach out and follow me. LinkedIn : https://uk.linkedin.com/in/shafrasul Twitter : https://twitter.com/shafrasul?lang=en-gb Website : http://www.shafrasul.com/ Tags: entrepreneurship, entrepreneur, how to become an entrepreneur, entrepreneur advice, entrepreneur motivation, become an entrepreneur business model, startup, innovation, entrepreneurship, business model generation, business, lean startup, startups, business model example, business model innovation, ask shaf, shaf rasul, King Gillette success story