The Economics of the Business - This section addresses the basic logic of how profits are earned in the business and how many units of a business's profits must be sold for the business to "break even" and then start earning a profit. - Items to include in this section:

• Revenue drivers and profit margins.

• Fixed and variable costs.

• Operating leverage* and its implications.

• Start-up costs (including legal expenses, fees for business licences and permits, website design, business logo design, etc.)

• Break-even analysis.

Explain and calculate properly all these economic points in terms of newly developed E-commerce business of tumblers.

i want all these economic concepts related to e-commerce business of tumblers in the business plan.

 

Economic concepts related to e-commerce business plan

• Revenue drivers and profit margins

Few E commerce especially websites are profitable. Important things usually they do not need to need funding in the market. Do not overthink market branding. In Global e commerce recently reported that e commerce sales expected to $4.2 trillion as of 2020 and will continuously rise up to 2023.

Other ecommerce drivers are

-logistics from third party

-Mobile internet explosions

-Rising range of online bankers thru shoppers

-Political willingness and increase in online trade

-Growing big data

For tumblers thru e commerce, product can be consider to hit up when consider the above guidelines

• Fixed and variable costs.

Fixed cost - remains the same regardless of the output of the production

variable cost - vary based on the production output

For tumblers it needs to consider what materials, resources or assets are variable and fixed. once considered you are be able to manage purchase expenses

• Operating leverage* and its implications.

Determines the gain and losses of the investment. Whether it profitable or encounter losses by borrowing money from a broker. Can also be favorable in the movement of the currency

For tumbler if ever invested to it thru broker expenses and purchase expenses must considered and must be part of the budget plan

• Start-up costs (including legal expenses, fees for business licences and permits, website design, business logo design, etc.)

Answer : Costs are different in every state, same with the fees for business license, permits. Website design price also varies on how much layout effects and others will be charge same with Business logo. It is base on the web designers fee

Most spend $1000 to $10,000 for professional design and up

• Break-even analysis.

Answer: Might be differ due to state prices and local prices expenses.

This is the break even formula

Q = ___F____

(P - V )

Q break even quantity

F total fixed cost

V variable cost per unit

P selling price per unit