Sales Mix: How to Calculate It For Increased Profits
It’s a universal business truth—not every product you offer is going to sell at a high rate at all times.
Although this is a part of doing business, it is important to understand how each product line is performing, and you’ll use a sales mix formula to determine that.
In this post, we’ll break down what sales mix is, how to calculate it, and some examples of using it to make business decisions.
What is sales mix?
Sales mix is the proportion of each type of product sold in a business compared to the business’s total sales. The purpose of calculating sales mix is to understand how the sales of different types of products impact profits.
When you dig into what your company’s sales mix is, you uncover hard data that tells you exactly how much money the sale of each product is contributing to the bottom line. This can not only help you determine how to set future budgets, but it can also provide information about the function, placement, and selling strategies behind each product your company offers.