One Side of The Coin
Profit margins have become the leading way for businesses to measure financial health, measuring the percentage of revenue remaining after covering costs. When margins are strong, it typically signals that the business is managing costs effectively, pricing its products strategically, and generating solid returns for shareholders. On the other hand, shrinking margins can point to deeper issues such as rising expenses, pricing pressure, or inefficiencies in operations. Beyond measuring internal performance, profit margins also serve as a valuable benchmarking tool, allowing companies to track progress over time and compare results against competitors in the same industry. They play a critical role in strategic decision-making, guiding leadership on pricing adjustments, cost management, and resource allocation. Investors and lenders closely evaluate margins to assess growth potential and overall profitability, while businesses can use margin analysis to identify their most profitable products, services, or customer segments.
The Other Side
However, the biggest downfall in the post-industrial economy is prioritising economic gain over society and the environment. Business owners have become so focused on creating the biggest margins possible that they have lost sight of their impacts. This dissociation from the product and the processes involved means people and the planet suffer as a consequence of trying to keep costs to a minimum.
VEJA
VEJA are a French trainer/sneaker company that takes a completely different approach to profit margins. Each shoe generates a 10-15% profit margin, which is approximately 80% lower than that of other leading shoe brands, which strive for 40-50%. The brand’s production costs are often five to seven times higher than the industry average. The difference lies in the materials and the people behind the product. The brand uses organic cotton instead of conventional alternatives, sources wild rubber directly from the Amazon rainforest, and manufactures in Brazil under stricter labour standards with higher wages. This reflects a commitment to environmental responsibility and fair working conditions.
One of the most distinctive things about VEJA’s business model is what it doesn’t do. Unlike most global fashion brands, VEJA skips traditional advertising altogether. There are no billboard campaigns, no magazine spreads, and no massive marketing budgets. By eliminating costly promotions, the company dramatically reduces overhead and instead channels those funds directly into its supply chain, where they can make a tangible impact.
Another unconventional choice is minimal discounting. While many brands rely heavily on sales, often selling more than half their inventory at marked-down prices, VEJA rarely participates in deep discount culture. Less than 1% of its products are sold on sale. This approach protects the integrity of the brand while supporting a more stable and responsible production cycle.
Most importantly, VEJA consistently reinvests its profits back into the business. Rather than prioritising expansion or shareholder payouts, the company focuses on strengthening its supply chain and advancing sustainable, ethical production methods. This long-term strategy is rooted not in trends, but in impact.
Not My Monkey 