On Mon, 14 May 2012 06:01:24 +0000 (UTC), Cydrome Leader
wrote:

This math is as nonsense as those "calculators" from places that do
backups and datarecovery where you type in numbers and they claim you lose
10% of your annual revenue per minute your computers are down or whatever.

That might be a stretch, but the real numbers are fairly close. If
the sales organization can't take orders for a day, that business will
probably go to their competition. Assuming 7x24 or about 350 working
days per year, the loss of one day sales is 1/350 the of the gross, or
about 0.3% The actual losses will be higher due to repair/recovery
costs, overtime to recover, and loss of reputation. The last is
fairly significant. I know of one shopping web site that went dark
for only about 3 hours. However, there was a dramatic drop in
subsequent sales for about a month due to rumors that the company had
gone out of business because their web site was down. My guess is
about 1% overall loss for a days downtime.

The only way it costs $75 to ship a box is if you factor in your 100
million dollar failed SAP installation as part of your "billing costS" or
whatever, and then blame the box for the expense.

I don't think anyone would be interested in my 30 year old
calculations. Also, I can't disclose number for current customers
because of confidentiality requirements. Sorry(tm).

Perhaps the 16GB iPhone 4S would be a suitable example. It costs
about $200 to manufacture, but sells retail for $500 from various
vendors, or $650 from Verizon. Using the $500 sales price, the cost
of shipping an empty iphone box is:
$500 - $200 = $300
The $300 pays for everything EXCEPT the product. For Verizon, 3.25
times cost is rather low for electronics. 4.0 to 4.5 times cost is
more typical.

The $75 per empty box is problematic, but the reason is not obvious.
If a company shipped just one product, the $75 would be valid and
useful. However, if the company shipped a wide variety of products,
some expensive, and others low cost, the overhead costs would be
distributed unevenly among the various products and quantities. It
would not be possible to assign a single "empty box" price tag to a
single product. It could be expressed as a percentage of selling
price (markup), but is usually more complexicated, having a fixed cost
for fixed overhead, and a variable cost that depends on the product
cost to manufacture. My $75 figure was mostly the fixed overhead,
that was not attached to any particular product.



--
Jeff Liebermann
150 Felker St #D http://www.LearnByDestroying.com
Santa Cruz CA 95060 http://802.11junk.com
Skype: JeffLiebermann AE6KS 831-336-2558