What is the average price of an item at the grocery store and the average gross margin?

2016-10-26T11:34:24-06:00By |Categories: Resellers|Tags: , , , , |

There is no real way that I know of to find an average, and I could be wrong about that.  Certainly you might find some analyst reports on public companies in a certain product category where it makes sense to assemble these averages, but for private companies, I do not know how you could assemble [...]

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I am currently working on the development of an e-commerce that sells healthy dry food. What are the typical margins?

2016-11-04T09:55:48-06:00By |Categories: Finance|Tags: , , , , , , , |

Question:  I am currently working on the development of an e-commerce that sells healthy dry food. What are the typical margins? I'm launching a webshop with healthy products, nutritional supplements and natural cosmetics from different distributors. What is the typical gross margin for this kind of products? What percentage of my budget should I allocate to marketing? [...]

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How are wholesale prices determined?

2016-10-23T16:30:28-06:00By |Categories: Resellers|Tags: , , , , , , |

This is a Quora question I was asked to answer.  Here is my answer. There are many different ways to set wholesale prices and anyone that does that will probably have their own nuances and rules of thumb they follow. For most product categories, consumers will compare you to competitive offerings, as they need a [...]

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Change the distribution structure for competitive advantage in consumer products

2016-11-24T19:37:48-07:00By |Categories: Strategy|Tags: , , , , , , , |

Take a look at the following back-of-the napkin P&L.  This is from an actual early-stage business.   The product retails for $40 and wholesale cost is $20, which is the gross revenue to the business.  COGS is fairly hefty because the business is small and does not yet have the volume to bring down its [...]

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How cost of goods sold (COGS) impacts a CPG company selling to retail

2018-12-08T13:53:53-07:00By |Categories: Downloads, Finance|Tags: , |

I work predominantly with small consumer companies, especially startups and a commonality I see among them is that their COGS is really high, and how COGS impacts a CPG company selling to retail is significant. COGS includes raw materials, manufacturing, assembly and freight.  This "Landed Cost" is the total cost of making the product [...]

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Separate investment costs from your operating costs in the profit and loss statement

2016-11-04T09:53:42-06:00By |Categories: Finance|Tags: , , , , |

This article talks about how to separate investment costs from your operating costs in the profit and loss statement so that you have good numbers from which to make meaningful analysis. P&L Cost Buckets In my P&L, I like to group operating costs into the following buckets:  COGS, marketing, and operations.  There are many expense line [...]

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How to use margins and benchmarks in financial statements for a CPG or consumer product business

2016-12-19T19:45:25-07:00By |Categories: Finance|Tags: , , , , , |

This post demonstrates how to use margins and benchmarks in financial statements for a CPG or consumer product business. Margins Defined By margins, I mean an expense line item that is relative to net profit, expressed in percentage.  Figure 1 is a basic example with the key margins to which we will pay attention. Figure [...]

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