With over 25 years of frontline experience Tom Shay is America's leading small business
management
expert. He's a "Must Have" for your next event.
Cost
of Inventory Calculator from Profits Plus
Go
to a trade show, or receive a special order offering from a vendor,
as you are trying to decide how to place an order for merchandise:
Order a smaller quantity, but pay a higher price, a shorter time
to pay for the merchandise and maybe pay a higher price for the
delivery of the merchandise.
Order with the special offering, and you receive a much longer time
to pay for the merchandise, perhaps free freight, but you have to
purchase a much larger quantity of merchandise.
Which way is more profitable for your business? Previously, you
had to perform a lot of calculations or just take a good guess.
We now provide you with a Cost of Inventory calculator.
You enter
this information:
How many you sell each month
The cost when ordering in the traditional method and in the special
order methods
The cost of freight for each of the two methods
The quantity you order with each method
How long you get before you pay for the item
The cost of money
When
using the Cost of Inventory calculator, enter this information,
click enter, and you will see the answer for each of the next eight
months. You also have the option of seeing this information in a
line chart format.As you create the initial calculated gross margin, the cost of the freight is not a component of that calculation. However, as you look at the calculations for the 60 to 240 day time period, we take a different approach. As you would have paid for the freight, and there is an anticipated difference in the freight cost of the two buying scenarios, we allow the freight to be utilized as a component of the gross margin calculation.
(Enter data in the column of cells highlighted in green)
MARCH 2024 Have the Small Business Conversations, Advisories and News sent to your inbox. Subscribe HERE
The March Small Business Advisory remembers a line from many a western movie; "They went that a-way" and expressions similar to that distract from a business giving great customer service.
The big news item on November 30, 2022 was the advent of ChatGPT; Artificial Intelligence applications which many believe are used exclusively by big businesses.
This does not have to be true as there are many applications we share that have usage in a small business.
Article of the Month
"No plan B"; the subtitle to Van Morrison's Born to Sing album. The idea of no plan B also applies to a small business when you think (or is it when you don't think) about when the time, or opportunity, comes that you can sell your business. Generally speaking, a small business owner gets less money when they decide to close their business.
Book of the Month
"Escape from Cubicle Nation" is the March book of the month. While directed towards those working a corporate job and wanting to become an entrepreneur, we remind readers about utilizing their gut feeling to make decisions in their business.
After all, you did use your gut feeling when you decided to open or purchase your business.
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With over 25 years of frontline experience Tom Shay is America's leading Small Business
Management
Expert. He's a "Must Have" for your next event.
The March Small Business Advisory remembers a line from many a western movie; "They went that a-way" and expressions similar to that distract from a business giving great customer service.
The big news item on November 30, 2022 was the advent of ChatGPT; Artificial Intelligence applications which many believe are used exclusively by big businesses.
This does not have to be true as there are many applications we share that have usage in a small business.
Article of the Month
"No plan B"; the subtitle to Van Morrison's Born to Sing album. The idea of no plan B also applies to a small business when you think (or is it when you don't think) about when the time, or opportunity, comes that you can sell your business. Generally speaking, a small business owner gets less money when they decide to close their business.
Book of the Month
"Escape from Cubicle Nation" is the March book of the month. While directed towards those working a corporate job and wanting to become an entrepreneur, we remind readers about utilizing their gut feeling to make decisions in their business.
After all, you did use your gut feeling when you decided to open or purchase your business.