When you sell any kind of product, you have to make sure that you make profit out of it. Otherwise, if defeats the purpose of doing business.
Gross profit is derived after deducting your gross sales from costs of goods sold. Net profit is the difference between gross profit and operating expenses. But how much profit should you target? 10%? 20%? 30%? or more? That depends on several factors.
When you're selling equipments, you have to consider the warranty costs. Although most OEMs give 1 year free warranty on parts, you render after sales service support. This has costs because you have to maintain a technician or engineer to support the equipment. There is cost involve when going to and fro the customer's place as well. Either your technician/engineer works part-time or full time for you, you have to calculate all the costs involve.
Make sure that you compute all possible costs to be incurred such as warranty, shipping, taxes, and other incidental costs related to the sale. After that, you can decide how much is your target profit would be.
Happy selling!
Gross profit is derived after deducting your gross sales from costs of goods sold. Net profit is the difference between gross profit and operating expenses. But how much profit should you target? 10%? 20%? 30%? or more? That depends on several factors.
When you're selling equipments, you have to consider the warranty costs. Although most OEMs give 1 year free warranty on parts, you render after sales service support. This has costs because you have to maintain a technician or engineer to support the equipment. There is cost involve when going to and fro the customer's place as well. Either your technician/engineer works part-time or full time for you, you have to calculate all the costs involve.
Make sure that you compute all possible costs to be incurred such as warranty, shipping, taxes, and other incidental costs related to the sale. After that, you can decide how much is your target profit would be.
Happy selling!
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