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4sgm Wholesale Dollar Items Product Distributor

Earning Potential

Following is an estimated scenario for earning potential.

Potential earnings using a basic formula.
Sales less expenses=profit

Following are the categories and the percentages of each item as related to total sales:

MERCHANDISE:52-55% PER YEAR and this will vary depending on what you find your clients are purchasing. If you choose to stock more cleaners for example, then your percentage will be higher as cleaner are above the average cost. Most items will cost you between 52 and 55 cents each. Cleaners may be as much as 89 cents, whereas greeting cards will cost around 35 cents. If you carry a rounded supply of merchandise, you should stay within this range. WAGES-10%-13% for the cost of staff and manager and includes payroll taxes and workman’s comp

FREIGHT:3-5% . Using local suppliers can keep this expense to a minimum. SALES-this percentage varies greatly but should average around 33%

FIXED EXPENSES: HEALTH INSURANCE-$100 per month suggested expense. INSURANCE– general business liability insurance and is based on the size of your space. Average is $1400 per year per 1,000 sq feet of space.

ELECTRIC-$1400 per 1,000 sq feet, per year, estimated, cost is based on square footage and the area your store is located in.

TELEPHONE and INTERNET ACCESS:$600 per 1,000 sq feet, per year, estimated PERSONNEL –expenses related to personnel such as pizza once a month and soda for a store meeting. Estimated at $700 per year.

RENT:including triple net based on square footage and totally variable based on demographic location. Estimated at $1,000 per month per 1,000 sq feet of space. Contact your local realtor to get a good idea of what space goes for in your area. SUPPLIES-office and store supplies, estimated at $50 monthly per 1,000 sq feet of space.

ADVERTISING:greatly variable depending on location. This is a must for success of a store. Estimated at $75 per month per $1,000 sq feet of space. DEPRECIATION-capital cost write off per accountant. Estimated at $4000 per year per 1,000 square feet of space.

OTHER EXPENSES:this category includes everything else not listed such as alarm system expense, replacement costs, etc. Estimated at $300 per year per 1,000 sq feet of space. Take your square footage and figure out all the fixed and variable expenses.

The formula is:
Use this formula to calculate the amount of sales you would need to produce in order to achieve the profit you desire.