Guidelines for Acceptable Direct Selling Expenses (1,202 words)

First, examine which expenses should be line items, and what percentage of total expenses they should be. If any one of these percentages is out of line, this could be the reason why your selling expense-to-sales ratio is too high overall. Refer to Chart A on page 39.

Note that the line item expenses are included in selling expenses. There is a column for a consumer catalog company and a separate column for a business-to-business catalog firm. I have based these ratio comparisons on a collection of the income statements from companies with annual sales ranging from $2 million to $30 million.