How Do I Calculate Variable Costs? cover art

How Do I Calculate Variable Costs?

How Do I Calculate Variable Costs?

Listen for free

View show details

About this listen

- Objective today:
    - Unit economics - like individual Lego building blocks that make up the overall profitability picture
    - Revenue per unit
    - Any cost during making and selling
    - Connected to gross margin.
        - 
            - Every % is a penny of each $ available to cover overhead
- Concept:
    - What makes it improve?
        - Increase price
        - Decrease variable expense
        - Cost of product
            - produce in bulk
            - cut costs where customers don’t mind (value engineering)
        - shipping
            - negotiate better rates
            - Offer free shipping above threshold
        - advertising & commission
            - Sell to existing audience
            - Partner with other brands to sell to their customer
    - Trade-offs
        - Sometimes spending more advertising dollars or offering referral or sales commission can accelerate revenues to help cover overhead but decrease our gross margin %
- Key Question + Action
    - **What is a unit for you?**
    - **What costs do you incur with each creation and sale of every unit?**


-----------------

Want customized help building out a growth plan for your business?

Schedule a free strategy call at Amplify.Business

Download free pdf guide at ForecastOnPurpose.com

Connect on LinkedIn

Watch episodes on YouTube

No reviews yet
In the spirit of reconciliation, Audible acknowledges the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.