Variable, Not Fixed Costs
In this article, you’ll learn: How to calculate a break-even demand per catalog using variable costs.
Below is a sample calculation to illustrate why it’s best to use only variable costs to select individuals to whom you should mail.
Step 1: Input Assumptions. Identify your historical catalog statistics/assumptions to get to break-even figures. In this example, gross-to-net margin is 70 percent, and gross merchandise/operations margin is 60 percent. The variable catalog cost is $0.70, and the catalog cost, with fixed costs spread across all of the catalogs printed, is $0.84.
- Companies:
- Michael Grant Direct
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