The ethics behind profit

Once, while driving in Trivandrum City, I saw a shop with a big banner: ‘Margin-free shop’. Presumably, they don’t keep any profit margin.

On seeing that, you almost get the feeling that ‘profit’ is a dirty word. In fact, my daughter even asked, “What’s wrong with a profit margin? How will they even survive without profits?”

This vilification of ‘profit’ has always baffled me. Especially in a state like Kerala, with a strong communist ethos, profit-making is probably considered a little bit evil 🙂

So much so that this is probably the only state in India, where you will find a shop advertising: ‘Margin-free jewellery shop.’

While I haven’t bought jewellery in decades, if I had to, I would look for a shop that sells quality products, not a ‘margin-free’ one.

In fact, we don’t buy margin free iPhones or MacBooks. I know that my MacBook has a really fat margin and yet, it is such a good value that I pay up the premium without a murmur.

Profit should not be a dirty word. It is what allows companies to scale up, serve large numbers of people, and pay good salaries to their employees.

Profit becomes a dirty word only when earned through unethical or inhumane practises (e.g., cheating, or price-gouging people in distress).

Let us build businesses ethically so that we can proudly say, “We are a profitable business.”

– Rajan
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HabitStrong Newsletter by Rajan Singh

In this fortnightly newsletter, Rajan shares inspiring lessons and stories from his career as an IPS officer, McKinsey consultant, investor, and now, as a startup founder. Join 25,000+ subscribers.

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