Distributor Profitability – How much margin to give to a distributor?

Assume you're a brand or a manufacturer trying to select a distributor for your business and the terms you'll be providing are a gross-margin of 5%, zero credit period (the credit period for the distributor is zero days from the manufacturer) and the average costs for the distributor is 2%. The distributor has to extend …

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PPC Search Marketing – Keyword Match Types

Search Engine Marketing is a powerful platform to push your products in the search-engine listings. The grand-daddies in the "search" business are Google and Amazon with billions in revenue. With millions of products listed and huge amount of search inventory with Google and Amazon, all advertisers and sellers compete to get their products on top …

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Cost of Capital, Debt:Equity Balancing, and Max Allowed Debt

Let's say you're in need of $1000 for some requirement, and you need to take a loan for the same. You approach various banks and you boil down to two banks: Bank A is ready to give you a maximum loan of $300 at 3% interest and Bank B is ready to give you a …

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Online Furniture Rental Market Size in India (2600 Crores – Top 15 cities)

Online Furniture & Appliance rentals have gained a lot of popularity in India especially in the big metros. The market is dominated with top players such as Furlenco, Rentomojo, Rentickle, Fabrento, CityFurnish, and others. But, what is the exact total addressable market size of this industry in the medium-term and long-term? Let's cut to the …

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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, Conversion Costs, BOM and GP 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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