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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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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