Learn to Prospect Efficiently

In order to calculate the incremental break-even point, you need to know the following:

1. Total direct selling expenses (printing, paper, lists, postage, etc.)

2. Gross margin ratio

3. Returns and allowances ratio

4.Variable order processing and fulfillment expense.

As you can see on page 62, the direct selling expenses are estimated to be $1,337,204, or $0.618 per catalog mailed. The gross margin ratio is 53.3 percent, and returns and allowances are 3.5 percent of net sales. The variable order processing and fulfillment expenses are $8.41 per order.