Don’t Try This at the Office

Knowing that 24-month customers historically respond at three to five times this rate, the sticker shock should be tempered with the anticipated ROI. And to be more fiscally responsible, you can calculate the contribution to overhead by revising the formula to incorporate the 12 percent fulfillment expense. (If you don’t know your company’s fulfillment expense-to-net-sales ratio, use an industry benchmark ranging from 11 percent to 15 percent.) Deduct 12 percent fulfillment expense from the 70 percent gross margin, leaving 58 percent.