The package has a fixed price. No two deliveries have cost the same.

Productisation usually breaks in delivery rather than in sales, and the average margin is the number that hides it for longest.

By Steve 5 min read
Abstract bridge artwork for The package has a fixed price. No two deliveries have cost the same.

The brochure says the implementation package is a fixed fee. Finance says the gross margin on it runs around forty per cent. Both statements are true, and together they conceal the thing that actually matters: that figure is an average of deliveries that took sixty hours and deliveries that took a hundred and sixty. The forty per cent is real in aggregate and describes almost none of the individual jobs. This is the most common failure mode in productising a service business, and it is rarely diagnosed as such. The…

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