3 ms·
Seems like an awful lot of trouble for 3-6% net after COGS. From that, they have to pay their employees, rents, lawyers, etc. all with the threat that on any gi
by nomkaaoa 11y ago
Seems like an awful lot of trouble for 3-6% net after COGS. From that, they have to pay their employees, rents, lawyers, etc. all with the threat that on any given day there could be wild fluctuations in their revenue. Good luck to them, but let's see how long they last. Amazon, unfortunately is a zero sum game.
- jsnell 11y agoThose costs (employees, rents, lawyers, etc) are already included. You're thinking of gross margin which is indeed based just on COGS. But the number in the infographic is net margin, and therefore covers all expenses of running the business.
- pmorici 11y agoAre you sure you aren't confusing net and gross? The graphic in the article pretty clearly says, "3-6% net profit margin per item". I would take that to mean after accounting for expenses. Meaning they make a profit of between 2-4 million on their 70 million in sales.
- kgwgk 11y agoIf it is really the net margin it doesn't make sense to say "per item". Maybe this metric includes all the variable costs (like product acquisition cost, salaries directly linked to handling the orders and cost of delivery) but there are still fixed costs that have to be paid from that "net."
- jamesfe 11y agoSeems like a lot of trouble until you have $70 million in your pocket, and then it doesn't.
- nomkaaoa 11y agotouché