How to Use the 80/20 Rule to Generate Massive Profits in your Business - Almost every ad...
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Think. Almost every ad you see that sells vacuum cleaners is offering them for $39 (yuck!) to just under $200. Mostly on the low end. Who wants the cheapest, lowest priced things? The 20% of the population who makes the lowest amount of money. Sure, there are well off people shopping at Wal-Mart, but they aren't the bulk of the business.
For example, in our town, there are 16 places you can buy a vacuum cleaner. All of them advertise from time to time. All advertise the same price point. They are dividing up the total market of 17,000 population, and they are sharing the lowest 20% of the profits, to be made from vacuum cleaners.
We advertise only the higher priced vacuum cleaners. We even put the prices in the ads. Our lowest price is $279. Most advertised machines are much higher. Our average profit from a single vacuum cleaner sale is almost exactly $300. That's easily 10 times more than the profit from a $59 sale. Even with Wal-Mart's "Bare bones" buying practices.
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