This analysis is carried out through the income statement made up of some flow variables that are characterized by being the accumulation of "something" (sales, expenses) during a specific period (a campaign, a month, a year) .
We can divide the income statement into 2 parts:
Marginal contribution
Expense table
Marginal contribution
The marginal contribution is derived from subtracting variable costs from the sales amount without VAT . It is very important because it calculates the expenses generated by sales , regardless of the actions taken in the short term.
In an online store it is calculated as follows:
Sale price without VAT – CMV – IIBB – Collection – Commissions = Marginal Contribution
The variable costs that we benin phone data identify in an online store are:
Cost of goods sold (CMS) : This is the cost to produce or purchase the good. If it is produced, labor and materials will be taken into account.
Gross Income (IIBB) : around 3% of the price without VAT, in most cases.
Collection : varies depending on the payment gateway, but is usually 5% of the sale price.
Commissions : Whether for the platform or for the sellers, a 3% commission can be estimated.
If this calculation is made with a single product, it is called Unitary Marginal Contribution .
Expense table
The expenditure table is the sum of:
marketing expenses,
administration costs and
logistics costs .
The way you detail this table will depend on what you want to measure and control.
For example, you can include Instagram Ads and product photos within marketing expenses because it helps you measure the impact of a change on the total result.
In administrative expenses, you have to take into account the time you dedicated to the tasks, even if you don't pay a salary.
It is advisable to include logistics costs in the expense table because, if you consider them variable, it could make it difficult to calculate the marginal contribution.
With this information you are now ready to calculate the break-even point , which shows the sales needed to break even.
This is how it is calculated:
Break even point = Total expense table / Marginal contribution in %
If you want to calculate it in units, you have to do the following:
Break-even point = Break-even point in pesos / Average price of products
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