SALES vs.REVENUE ____________
Mirror, yes... you!, Mirror on the wall
Among Sales and Revenue, who is more
likely to fall?
Well, good sales figures will make your mid-term report sleek,
But with no revenue, your future (at the year end) appears bleak.
And so would any self respecting magic mirror have said had it been in such a position that it could answer questions. ( I am actually surprised that Rowling did not have any magic mirror in the entire Harry Potter series Yes, there were all moving photographs but then a mirror is a mirror. Wait a minute, there was one in the first right?.. that's enough of mirrors.
Let us go back to the subject).
THE DIFFERENCE BETWEEN THEM
Therefore, we have the modest and suave 'Sales' on one side and
the loutish and brutal “Revenue" on the other.” So who is more important?
Sales surely because I have named this blog as " Salesgyaan". Well
no friends, it is actually the reverse. Revenue is much much more important. Let
me define what is revenue? Revenue
is what the company earns from the customer against the supply of its services
or products which has been done against the long and long purchase or work
order (for capital equipment,
purchase orders are usually long). You have the ROI (the Return of Investment) ...You made a product for $60,
suffered an expense on it of $10, paid another $10 to the government as tax and
the balance $20 is the revenue
or PAT (profit after tax). This is what Revenue is.
Now you are confused!! Wait a minute, you say. If this is revenue,
then what is the sale? What is selling? If we had been talking about selling
groceries or tools or F.M.C.G, then sales and revenue has only a small gap or
none, say maximum 1 or 2 days. However, in capital equipment, the entire
scenario changes. You are investing millions and you are getting back millions,
so you just can't afford to be nonchalant and cavalier in your approach.
Everything needs to be written down; the contract has to be signed, both
parties agreeing to the points written. This paper or contract is your Sale. It
is a contractual assurance that party X is going to buy ABCD from party Y for a value of $Q million
dollars. And the process will be done in this way. A long list will then follow
describing the breakup, which you had hammered out with your counterpart in the
purchaser's company.
Here, in the final stages you will see that people are going bang bang for 500$ when you are selling or buying million dollar products. Do not point these situations out as ridiculous but accept them as compared to your sale value, its peanuts. That $500 can mar your case. You see everybody wishes to have played a role in decreasing expenses and what better role to play that to cut down the profits of the manufacturer who wants to make a buck doing fair business. Its a different matter that the Air Conditioners go on and on even in empty rooms, nobody switches off the fans before they quit..that's entirely different.(Never point out these things to the customer..i was only telling you as a fellow salesperson).
So, you have got your sales order or you have achieved your sale, can you now forget it?
No you can't..May be your responsibility has decreased somewhat but it is still there,.very much there..and it will be there till you get the revenue as per the steps outlined in the Purchase Order or Sales Contract.. We will tackle those steps in our next discussion.
Before we finish, it seems that plenty of people are curious as to the word Gyaan and Salesgyaan. Well, Gyaan in Hindi means knowledge or wisdom. So-Salesgyaan means imparting knowledge of sales ( revenue too, hence) and 'the selling process' to those who want to avail of the facility, or wish to know of the same.
auf Wiedersehen,
-------someone---------
from Bag's end
NB: Ever since the movie,my signing myself Bilbo has become too common. Though when i started, I had never even heard of the movie. Therefore, from now on., I'll sign 'someone from bag's end' till I can think of a more suitable name. (or maybe you can suggest one for me)
