What are some barriers of entry to running a successful eCommerce business?

2018-06-13T21:17:08+00:00By |Categories: Finance|Tags: , , , |

This is a Quora question I was asked and my answer is as follows. My sense is that a minimum qualification for “successful” is profitable on an EBITDA basis (net profit or earnings before interest and taxes, depreciation and amortization) such that your profits will pay back your original investment in a defined time [...]

What is the cost to revenue ratio of an e-commerce infrastructure in the retail industry?

2018-06-06T11:55:08+00:00By |Categories: Finance|Tags: , , , |

This is a Quora question I was asked and my answer is as follows. For my P&L’s, I break cost up into 3-main buckets: COGS (cost of goods sold) Marketing Operations I compute COGS based on landed costs, which includes the complete costs to produce a product so that it is sitting in your warehouse [...]

How much (in % of revenues) does a food and drinks wholesaler/distributor spend in logistics, meaning, paying a 3rd party to pick up and deliver the products to the retailer’s warehouse?

2018-05-17T12:01:11+00:00By |Categories: Production & Logistics|Tags: , , , |

This is a Quora questions that I was asked to answer. Here is my answer. That will depend on a lot of factors - your volume, distances, consistency, speed of delivery, does the product require cooling, how is it packaged (case and pallet configurations), carrier, etc. For 8+ figures in annual sales, I have gotten [...]

The Flow of Money in a Consumer Product Company (infographic)

2018-12-08T14:11:46+00:00By |Categories: Downloads, Finance, Visuals|Tags: , , , , , , , , , , , , , , , , , |

The best way to think about this is a profit and loss statement, starting with revenue at the top and net income at the bottom. A customer flows from the top, acquired through marketing spend, and everything in between to deliver that product to them, with profit left over, and all the key metrics [...]

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+00:00By |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? [...]

Change the distribution structure for competitive advantage in consumer products

2016-11-24T19:37:48+00:00By |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 [...]

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

2016-11-04T09:53:42+00:00By |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 [...]