Example below is using variable amounts entered in transaction amount, yearly sales, and average profit margin (highlighted). Enter your own numbers and give it a spin:
$
transaction amount (from sale of slow moving parts)
$
F
Cents on the dollar
-
$
total expense (transaction amount at 50% discount + 5% fee + estimated 3% for shipping)
$
net cash
Profit!
ROI!
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$
net cash (reinvested in fast moving parts)
x
$
yearly sales
$
gross sales (from reinvested cash)
$
gross sales
x
% average profit margin*
$
gross profit
$
gross profit
-
$
net loss (listed above)
$
net gain (loss)
$
net gain
÷
$
transaction amount (listed above)
net ROI
* Calculations based on figures from Mike Nicholes “
Professional Inventory Management
” (2005)