Determining Product-Level Profitability and Unit-Level Economics

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• Is the pricing correct?
• Can we price correctly in order to get a level of desired profitability?
• Can they ever make money on this product?
• Is there a way to reduce costs?
• Are the costs included in this product truly needed?
• Should we discontinue this product or expand it further?

Many companies simply do not know if their products are profitable. 8020 Consulting's Private Equity Team can help you get beyond intuition to true visibility on profitability.

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We'll Determine Profitability by Product or Line of Business by:

1. Segmenting the products or lines of business
2. Analyzing direct costs associated with the products
3. Determining indirect costs and appropriate allocation
4. Assessing pricing and other costs of sales (e.g., Costs of Goods Sold (COGS), discounts, commissions)
5. Providing reporting on unit level economics
6. Reviewing findings with management and/or project sponsor
7. Making adjustments to pricing and/or costs to optimize for more profit (which could include elimination or expansion of a product or line of business)