I think this is mostly a management decision, not an academic one. If I'm selling commodity items, net profit is probably most valuable as high volume is inherent with commodities (think Microsoft).
If I'm a one man band selling selling value added services and consulting (think most Rbase developers), that new sales rep who swamps us with a gazillion low margin orders didn't do us any favors. So, someone wanting more market share might accept a smaller margin in exchange for more unique customer orders. Or, maybe a plant or shipping department is at capacity, so margin is more valuable. and so on. fwiw, Ben Petersen On 7 Nov 2002, at 10:59, tellef wrote: > > >Let's say that I have $100,000 in sales with the COGS exactly > >$50,000. > Then > >let's say that you have $200,000 in sales at a COGS of $150,000. We > >each brought in $50,000 in gross margin, but my $50,000 cost the firm > >less than your $50,000. > > You hit it on the head, Steve. You're right. You both brought in > $50,000 in profit but the profit percentage is higher in your case; > you sold at a 50% average profit, whereas Dennis sold at a 25% profit. > So it seems that the profit dollars should be somehow weighted > against the total sales dollars, do you think? > > Is this more 'important' than the fact that Dennis actually brought in > more sales revenue? I don't know if this matters but I mentioned in > my email of a few seconds ago that we are NOT comparing like > inventory; a person can sell a $100 item or a $5000 item. > > > Karen > > > > > ================================================ > TO SEE MESSAGE POSTING GUIDELINES: > Send a plain text email to [EMAIL PROTECTED] > In the message body, put just two words: INTRO rbase-l > ================================================ > TO UNSUBSCRIBE: send a plain text email to [EMAIL PROTECTED] In > the message body, put just two words: UNSUBSCRIBE rbase-l > ================================================ TO SEARCH ARCHIVES: > http://www.mail-archive.com/rbase-l%40sonetmail.com/ > ================================================ TO SEE MESSAGE POSTING GUIDELINES: Send a plain text email to [EMAIL PROTECTED] In the message body, put just two words: INTRO rbase-l ================================================ TO UNSUBSCRIBE: send a plain text email to [EMAIL PROTECTED] In the message body, put just two words: UNSUBSCRIBE rbase-l ================================================ TO SEARCH ARCHIVES: http://www.mail-archive.com/rbase-l%40sonetmail.com/
