How to Determine Your Catalog’s Break-even Point
The following calculation will help determine your incremental BEP:
1.Take your net sales and subtract cost of goods sold
2. Subtract direct selling expenses.
3. Subtrat variable order-processing costs.
The resulting number is your BEP.
A fully-absorbed BEP is calculated the same way as the incremental BEP, with one significant exception: All fixed overhead expenses should also be included as part of your total costs. Our focus this month is on the value of the incremental BEP. We’ll also look at the line-item expenses to be included in your costs.
- Companies:
- Lett Direct Inc.
Steve Lett graduated from Indiana University in 1970 and immediately began his 50-year career in Direct Marketing; mainly catalogs.
Steve spent the first 25 years of his career in executive level positions at both consumer and business-to-business companies. The next 25 years have been with Lett Direct, Inc., the company Steve founded in early 1995. Lett Direct, Inc., is a catalog and internet consulting firm specializing in circulation planning, plan execution, analysis and digital marketing (Google Premier Partner).
Steve has served on the Ethics Committee of the Direct Marketing Association (DMA) and on a number of company boards, both public and private. He served on the Board of the ACMA. He has been the subject of two Harvard Business School case studies. He is the author of a book, Strategic Catalog Marketing. Steve is a past Chairman of both the Catalog Council and Business Mail Council of the DMA. He spent a few years teaching Direct Marketing at Indiana University in Bloomington, Indiana.
You can contact Steve at stevelett@lettdirect.com.
