Sales cost and profitability management

Sales cost to revenue ratio is one assumptions behind profitability projections. Minimizing the cost of sales while staying within assumptions boundaries is must.


Sales ticket Size Mix


Typically a sales ticket size translated into the higher sales profitability per dollar of sale. Sales people are always encouraged and incentivized for having larger ticket size. While the ticket size has to do with the sales effort, here are the other factors which influence the ticket size

Sales ticket-size is the sales value of a sales unit.

Typically a sales ticket size translated into the higher sales profitability per dollar of sale. Sales people are always encouraged and incentivized for having larger ticket size. While the ticket size has to do with the sales effort, here are the other factors, which influence the ticket size:

  • The product: Some products are inherently small ticket (like commodity products..) OR large ticket sizes.
  • The channel: 3rd party distribution typically is for small ticket size.=
  • Sales Person expertise and tenure: A more tenured sales person will achieve higher ticket size.
  • Product Life Cycle: The average ticket size changes given the stage of product life cycle. For example- in case of toys OR electronics, a new and latest product ends up with a higher ticket size because of its newness, and it reduces, as the product reaches its maturity.
  • Seasonality: A festive season may lead to a higher ticket size.

A sales person has to balance between the ticket size and sales velocity and productivity. Going only for big ticket size (which assumingly take longer lead times) may not be the best approach, when you have a threat of loosing the sale all to gather. Sometime a small ticket size 'foot in the door' approach may work better. That's why, the ticket size targets are set keeping the above factors in mind.