The result of the activities of any manufacturing enterprise are finished goods intended for sale to the final consumer. The set of goods sold by the manufacturer is called "sales". This concept implies the amount of not only manufactured, but also sold goods. The result of sales is the sales revenue received on the account of the company.
Types of products
The production of the final product goes through several stages - from the stage of processing of raw materials to the storage of the final product. Conventionally, the production process is divided into three stages through which the assortment unit must go through before becoming a finished product.
- Work in progress includes the initial stages of manufacturing the final product, starting from the purchase of raw materials and ordering the stage of semi-finished products (semi-finished product).
- Semi-finished products are products in which the production cycle is currently not completed. Further processing will be carried out by the company or given to third-party suppliers. Sometimes semi-finished products can be sold to the final consumer - in this case, the buyer should be aware of the shortcomings of such a product.
- Finished products - an assortment of products that have gone through all stages of the production cycle. The resulting products must comply with technical specifications and current state standards, must be accepted by the quality control department and are intended for sale to the final consumer.
Finished and marketed products: similarities and differences
The products sold by the enterprise consist of the finished product line that was shipped to the buyer and for which money had already been received. The similarity of these two types is that all operations are carried out with products that have undergone a full cycle of technological processing. The difference is that the products sold are the goods for which money has already been received, and the finished products are those that were sold during the reporting period, together with the stock in the warehouse that are still waiting for their buyer. If the finished product is not sold, then the costs of its production will become costs for the enterprise as a whole.
Formula for the calculation of sales
The volume of products sold is calculated according to a formula that takes into account inventories in warehouses. This value should be tied to a specific time interval. The calculation formula is as follows:
- RealPr = On + ProductPr - Ok,
where He, Ok - the remnants of unsold products stored in warehouses at the beginning and end of the time interval.
Pricing of products sold
The selling price of the finished product must comply with the following parameters:
- competitiveness;
- profitability;
- attractiveness to buyers.
These three factors underpin sales performance. Consider each indicator in more detail.
Competitiveness
The cost of production of each commodity unit should lie in the price range represented by the main competitors. To do this, marketers determine a strategy for positioning prices, in which the company's products fit into the realities of the market. To do this, monitor the prices of competitors and form a range of retail value, which should fit into the final price of products sold.
IMPORTANT! Price positioning depends on many individual factors: brand reputation, customer activity, intensity of promotion of competitive products.
Profitability
The cost parameter can be determined in two ways: to calculate the total cost of the cost of producing one unit of goods or to find the final quotient of dividing the total costs of the company by the production of a certain amount of products, affecting its volume and cost. Selling products when forming the final price takes into account two factors:
- the cost of production per unit of goods or standard batch;
- business expenses incurred by the company in order to sell its products.
Costing method
Manufacturing enterprises often cannot determine the cost per unit of finished goods, but operate on statistics of a larger scale. The administration of the company knows how much money has been spent on producing batches of goods and how many units of finished products in one such lot.
Using this method, you can calculate the cost of goods in stock. To the sum of the purchase of goods from the manufacturer should be added the total costs of the enterprise for storage, accounting of goods and delivery to the final consumer (or to the retail network). The calculation of profitability gives the minimum price below which the cost of production cannot be lowered - its production will become unprofitable (unprofitable).
Attractiveness for buyers
The third stage is to assess the attractiveness of the goods from the point of view of buyers. To do this, various surveys are conducted that evaluate the willingness of buyers to pay a certain price for a product.
Important! Each buyer expresses his subjective opinion, taking into account the characteristics of this product, but in general, such surveys give an objective assessment of the expectations of customers.
The products sold are the response of each customer to the choice of a product, brand, or manufacturer.
Range of possibilities
As you can see, the price of products sold should lie in a narrow range of opportunities that provide it with profitability, competitors and customers. Without adhering to this principle, it is impossible to predict sales growth and increase the rate of production of finished products - it is entirely possible that, due to unattractiveness or high cost, finished products will be dusted in the warehouse, and after that they will be disposed of or sold for nothing.
Summary
For any manufacturing enterprise, sold products are a factor that directly forms the profitability of a business entity. Without a developed sales structure, the production process stops quickly, the company is insolvent. If there is no state support, the company becomes bankrupt, people lose their jobs, and the owners of the company will face the sad fate of bankrupt.
To avoid the sad scenario, you should thoroughly study the market opportunities and take into account the prospects of the manufactured goods. Even an expensive product can find its buyer if it is desired by most buyers.