Selling products with unlimited sales margins (the profit percentage on sold items) should violate the rules of economics. Except there is a way to do it by selling products that cost you nothing. This sounds impossible, but it isn’t. The trick is to focus on byproducts of production and excess capacity. As an aside, a sales margin is the

During a recent visit to the Pierotucci leathergoods factory in Florence, Italy, I was shown their Fortunata product line: bags made from small coloured leather squares assembled together in fun patterns. As the leather squares are made from scrap leather, the leather raw material costs for those bags is nothing as otherwise since this leather scrap would be otherwise thrown out. The factory has conceived a product to monetize byproducts of their production process, and has turned garbage into profits.

Apply this concept to your business and create products which utilize byproducts of your production process. Such products cost you nothing in materials and generate revenue. It goes without saying that free inputs of productions are to be taken advantage of, which massively increase your sales margins (read more about sales margins in Sugar and Spice: Sales Margin and Volume).

Alternatively, see if there is a direct market for any of your byproducts of production. Raw materials generally generate less profit than products which have already been transformed (i.e. wood vs. furniture), but it is still a leap ahead to sell such byproducts over disposing of them or worse having to incur an expense in their regard (i.e. disposal fees). A classic example is the sale of used (empty) wine barrels to whiskey makers. A barrel which is otherwise simply waste is now being sold for top dollar as it flavours whiskey during its aging process.

The author of The 9% Edge, Candy Valentino also applies this concept to service businesses. Does your staff have monetizable skills and insufficient work to fill all of their working hours? Consider contracting out that staff part-time to bring in some additional revenue. The same applies if you want to bring in-house certain skills, but don’t have enough work to justify hiring such staff. Subsidize this new staff by contracting out some of their time to other businesses. You can approach bulk orders the same way by selling for a profit the excess product purchased.

Remember that whatever tools or support your business needs, other businesses likely need them as well. Skills or tools which you have developed in-house to avoid having to hire others to do the work for you may very well be of interest to other businesses and can be accordingly monetized.

The crazy thing is that sometimes solving a business need of yours can open the door to a very successful product for other businesses facing the same issue. Shopify started as a Canadian business trying to sell snowboards online. However, it couldn’t find a good e-commerce platform, so it developed its own. The snowboard business was a dud, but they struck gold with the e-commerce platform which they continue to sell to millions of businesses around the world which transformed Shopify into a multibillion-dollar company.

Finally, knowledge accumulated through your business can also be used to create digital products or e-courses to help other similarly situated businesses. These digital products and e-courses also have effectively an unlimited margin as each additional product download costs your business nothing and brings in revenue. There are development costs but the main one is accumulating the associated knowledge which is a byproduct of running your business, and like any other byproduct can be monetized.

So keep your eyes open and see what can be done with the byproducts of your business as they often can be monetized in hugely successful ways. Best of luck!