Why Margin Compression Impacts More Companies Than Ever

A confluence of forces has facilitated the entry of new competitors into a broad range of industries and increased margin compression on more companies than before.

A wealth of overseas contract manufacturing centers has made it easier than ever for companies without manufacturing capabilities to create private label products.   By creating their own brand of products, channels like Amazon and Target are able to sell goods that compete against their vendors whose products they sell.

How to Repair Margin Compression

Margin compression is caused by a broad range of factors and while repair requires careful consideration of a number of areas, this can be done with a focused approach.

At Avolusis, we first consider top-line revenue and focus on:  Differentiation, Discovery, Validation, and Pricing.

What is Margin Compression

Margin compression results when a company is forced to price its products and services at a smaller markup over costs.   Margin compression is often seen in competitive markets where customers can choose between many suppliers of similar quality (e.g. wireless providers, cable providers, payments providers, clothing, manufacturing, etc.) and is wide spread in commodity markets (e.g. oil, natural gas, aluminum, copper, recyclables, food basics, etc.).  But more and more it is happening across many industries.  (see Why Margin Compression Impacts More Companies Than Ever)

How Can  Avolusis Help?

The 5 Second Answer

Avolusis helps companies repair margin compression.  We help companies grow, transform, and turnaround by enabling their teams to go beyond what they thought possible.  Contact Us, tell us your challenge, and we’ll do an initial consult for free – sometimes for whole day on site... for free.

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Margin Compression Book

So much has been written on management to make it seem complicated.  But after more than 24 years of managing and advising, I still find common sense most powerful in creating that special balance between customer needs, earnings expectations, organizational dynamics, and more.

At a very young age, we learn the golden rules of life.  And since business is ever more simple than life, the rules of business should be simpler too.

So with a bit of tongue-in-cheek, here are 15 of them in one  easy read.