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(((10.00+2.00))/(1-0.85))
OK, lets take a different approach to this. Would a better way of approaching this to find the break even point on [Cost] THEN apply linear markup?
[Purchase]+[Postage] is my base cost.
[Purchase] = 10.00
[Postage] = 2.00
Selling on eBay or Amazon at [Purchase]+[Postage] would yield a loss, since they would charge a sales fee.
[Fee] = 15%
(10.00+2.00) = 12.00
(12.00*0.15) = 1.8
(12.00-1.8) = 11.73
(((12.00-((10.00+2.00)+1.80))/12.00)*100) = -15%
If a 15% sales fee was added to (([Purchase]+[Postage])*1.15), that would still yield a loss, since the price has been increased, in turn the sales fee would be also.
[Fee] = 15%
((10.00+2.00)*1.15) = 13.80
(13.80*0.15) = 2.07
(13.80-2.07) = 11.73
(((13.80-((10.00+2.00)+2.07))/13.80)*100) = -1.95652173913%
So what is the best approach to the problem?
Simply stating 'Deal with only products of healthy G.P.M' is not helpful is it?
I have been speaking with a freelancer on resolution to the problem, he understood the requirement, I'm not to sure why it is that you do not and frankly I'm not sure how else to write the question. Sometimes that is half the problem right? I certainly appreciate that as I have worked in the IT industry for over 20 years.
The freelancer writes in response: "The ideal is to assess how the fees affect the system and then create a statistical model to indicate the risk of each product. In this way we can evaluate the set of all products for which profit margins stay positive."
[comment removed by administrator]. Have you considered I might be the manufacturer or that I might have to stock all items regardless because I'm a distributor. Maybe you should also consider that even as a reseller, the other resellers have the same problem? I have a question, the question was not for you to question my reasoning, but for assistance with providing a solution to a mathematical problem.[comment removed by administrator].
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