Editor’s note: This article was first published in July 2014. All its figures come from a 2014 infographic and are unsourced beyond it, such as printer ink at 300%, text messages at 6,000% and coffee at 2,900%.
Sell a few products with a very high profit margin, or sell lots of products with a low profit margin. The result of this equation would be proportional.
In the search for the most profitable products, some figures stand out, and if you’re looking to start a business or wondering what kind of products you could sell, they can at least point you in the right direction.
Printer ink, for example, has a profit margin of 300%, while text messages have a profit margin of 6,000%. That’s why services like WhatsApp have hurt a very important part of the phone companies’ business.
(Read: How to find the perfect product to sell)
The infographic this article is based on, created by Sumocoupon, takes into account the profitability of a product calculated from its production cost and its price to the end consumer. That’s why, obviously, a service business can be more profitable than a shop selling any kind of product. For example, home cleaning services reach a profit margin of 5,900%, because if we work out the hourly rate and the costs associated with the service, we can deduce that it is practically 98% labour and 2% cleaning products.
We’d find great profitability in products related to drinks and hospitality.
Coffee has a 2,900% profit margin, while in a restaurant wine is marked up by 400% on average. And if you decide to order a soft drink to spend less money, it turns out that soft drinks carry a profit margin of 1,150%.
Shall we try ordering bottled mineral water? Well, that can have a profit margin of 2,000%.
(Read: Clothing, food and technology among the most profitable businesses)
High profit margins on prescription drugs.
Pharmaceutical companies work with high profit margins ranging from 300% to more than 3,000%. In fact, Prozac has a margin of 4,451%, according to the infographic.
In short, we could say that the most profitable products are services and electronics. Within electronics we could also include digital products, since today they would have the highest profit margins of all, considering that their start-up and operating costs are minimal.
For example, software, apps or eBooks.
Featured image: frankieleon, CC BY 2.0, via Flickr.
