Each item is purchased for $5 and generates net revenue (after shipping, platform fees, etc.) of $7. You have $5,000
Each item is purchased for $5 and generates net revenue (after shipping, platform fees, etc.) of $7. You have $5,000 in cash and a credit card with a $20,000 limit. plan is to make a big initial purchase on August 1, 2023 and to receive the product on August 18, at which point will start bringing in revenue.
Q1 . Fill in the Credit Card Float spreadsheet with these assumptions. How much Annual Income from Sales appears to be possible from this strategy?
Q2 . The first month certainly looks very attractive...what's different about the second month?
Q3 : How much of the second shipment of inventory needs to be sold before second credit-card statement falls due?
Q4 : How do the economics (and attractiveness) of this business change if can get $7.50 for each plushie instead of $7, or pay $4.50 instead of $5?
Q5 : Why is this $0.50 revenue improvement such a large difference? Does this give some insight into why some vendors are tempted to "cut corners"?
Q6. supplier offers to expedite shipping for an additional $0.50 per item so that the product arrives in 7 days rather than 18. Is paying for expedited shipping a good idea?