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Maybe not unusual for a young, growing company, but its obviously not sustainable for each dollar in profit to cost more than a dollar in sales/marketing effort
by ac29 5y ago
Maybe not unusual for a young, growing company, but its obviously not sustainable for each dollar in profit to cost more than a dollar in sales/marketing effort. Thats a negative ROI.
- wonnage 5y agoYou're confusing profit and revenue
- gamblor956 5y agoGross profit = the profit from a specific business activity, in this case, sales, when looking solely at sales revenue less the specific costs of generating that revenue (aka COGS). Net profit = the profit from the overall business, taking into account all sources of income and all expenses. Sales and marketing are usually not treated as part of COGS, because they are not a necessary expense (in this context, COGS would include things like materials and production costs).
- RC_ITR 5y agoMany investors think in gross profit terms rather than revenue terms, because gross profit is the actual “cash in” from a given sale. That had become less common because software has famously high gross margins that aren’t necessarily linearly tied to revenue, but allbirds are shoes.
- deleted 5y ago[deleted]