Indirect Costs, Marginal Cost, Marginal Revenue, and Quantity Discounts – Supplier & Buyer Views

In retail, one of the most common negotiations between a buyer and a seller would be something like: If you want the price to be lower by x%, you need to pick up y% more stock right now. Where is this coming from? What does this even mean at a deeper level? We have seen …

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Direct Costs, Indirect Costs (Overheads and G&A)

Knowing the overhead costs is essential to any manufacturer in calculating the total cost of manufacturing of a product and hence to set a profitable selling price. The buyer should always know what is the overhead cost and indirect cost included in the product as a percentage of the cost of the product that the …

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Deficit Financing and Inflation Explained Simply

Normally, any entity spends basis its earnings or how much money is in their bank. But, governments are an exception to this behavior. If government has to spend, they spend. They may not exactly care if they have the money to spend or not. If they don’t have the money, governments will simply print some …

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CPC Campaigns – Relation between Budget and CTRs

We are going to talk about the relation between Campaign Budget and CTR in CPC digital advertising, even though budget shouldn’t affect CTRs in an ideal world. The above data is for a CPC campaign. The details of the campaign metrics are mentioned in the table above. If you observe in the above data, the …

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The 12 most overlooked truths of money and life ‘no one teaches you in school,’ says financial psychology expert

I am very impressed by this article and I want to share it with everyone. This was originally written by Morgan Housel for CNBC and you can find the original article here. Here are a few things that generally aren't taught in school but I've noticed are vital in business and investing: The ability to …

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Prime Costs and Conversion Costs in Manufacturing

When you talk to manufacturers, they frequently use a term called ‘conversion costs’ and a few of them also use the term ‘Prime Costs’ (especially used by Chinese vendors). A typical manufacturer would look at charging you as below: So, you could guess: Conversion Cost is the total cost that is borne by the manufacturer …

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Whenever there is no positive correlation between EBITDA and FCF, always trust FCF.

Comparing any two entities, may it be two different sportsmen like Michael Jordan and Lionel Messi or two different companies like Apple and GE, is always very difficult because there is no common structure to compare them. It is comparatively a bit easier to compare sportsmen or companies within the same category as comparing Ronaldo …

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Three Pillars of Demand Generation

Demand Generation is a set of activities that communicates relevant messages to appropriate audience and get them excited and interested about a company's products and services with an intention to convert the prospect into a qualified lead and then into a customer. The goal of demand generation is to develop the key prospect or customer …

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Fabric manufacturing today – weaving and knitting.

Textile manufacturing is a major industry and it is based on the conversion of fiber into yarn and yarn into fabric. Fabric is probably one of the most essential needs of humans, and it is just sheer beauty in how we convert fiber to fabric. The world consumes about 200 billion new t-shirts every year. …

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Beans and Bean-bags: Manufacturing and Marketing

Designed by Piero Gatti, Cesare Paolini, and Franco Teodoro and produced by the Italian company Zanotta in 1969, beanbags have become a globally recognized piece of furniture. Today, the global bean bag market is estimated to be around 100 million USD and is expected to reach 1 billion USD in its market size by 2026. The …

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Furniture E-commerce Marketplace – The Four Major Challenges

It is now clear that India has two large online marketplaces, Amazon and Flipkart, with Paytm and Snapdeal losing steam in the last five years. All these platforms have largely grown in size with electronics being the major contributor and the primary reason for the consumer-pull (with discounts on top brands). Electronics, followed by other …

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Which Mattress Is Good To Alleviate Your Back Pain?

When you are sleeping, your body essentially rests on your ears, shoulders, hips and spine. The position of the spine and the gap between the spine and the mattress is what that causes all the lower back tension. Today it is largely agreed among all esteemed medical research that if you are suffering from chronic …

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Spring Mattresses in India – Bonnel Springs vs. Pocket Springs

In a previous blogpost, I discussed about the foam mattresses market and manufacturing in India. In this blogpost, we will have a similar discussion specifically on spring mattresses and the details of the product manufacturing. Recap of the Mattress Market in India The market size of the Indian mattress industry is close to 10,000 Crores …

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Recliners Market in India

Gone are the days when recliners were only seen in the ultra-rich houses in India. Recliners are one of the most aspirational living room items for the average Indian today from an NRI household to the average household and are now commonly seen in an average middle and upper-middle income households. A majority of this …

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Acacia vs. Teak Wood (and Straight grain vs. Interlocked grain)

Acacia (a.k.a Babul in India) is a bushy kind of a tree that takes a lot of time to mature. It is known for its huge thorns. It is indigenous to the Indian Sub-continent as also in Tropical Africa, Burma, Sri Lanka, Saudi Arabia, Egypt and in West and East Sudan. In India, natural babul forests are …

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Rich Couch and Poor Couch – The Ferrari and Maruti of Couches are not so distinguishable!

As a child, I was always excited to buy something new and I still have that child in me every time I have to buy something new. As a buyer, I want to see the value I am getting for that extra buck (even in terms of vanity). When you start to research about cars …

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The importance of LTV to CAC Ratio and why should it atleast be 3X?

Measuring the LTV:CAC ratio is important because you don’t want the cost of acquiring a customer to be higher than the value of the customer. Even if it is 1:1, it is harder to be profitable. Even if it is just >1, it is difficult to be profitable because you have other costs involved in …

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Foam Mattress – Market Overview, Manufacturing Process, Adulteration Methods, Cost Structure and Density Testing

In this blog post, we will discuss the foam mattress market in India, the manufacturing process involved, adulteration methods used by manufacturers, the cost structure of manufacturing and the testing methods of various density foams. Market Overview The market size of the Indian mattress industry is close to 10,000 Crores (INR) and is comprised of …

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Import Costing: FOB vs. CIF vs Landing Cost

In this blogpost, we will understand the cost structure of importing an electronic good from China to India in detail.  When importing any item and negotiating with the seller in another country, broadly the options available are FOB and CIF. Not all sellers provide CIF but they atleast will have some agents who can take …

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