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Topic:

Topic created : 3.06.2010, 00:58

DaBatThrower

Hello everyone,
First post!

I'm a new player with a store, bakery, and mill. My bakery is doing very well, and my mill is doing fine. My store has good days and bad days, mainly because of supply!

Based on what I've been reading this is a market that is in low supply right now. My concerns are as follows: my store sells food stuffs and about 40% of the products cannot be bought for less than the city average and are of the same quality. This means that, for it to be worth buying I would need to mark up the cost somewhat and post prices even higher than city average.

I am hesitant to spend large sums of money ordering products for higher than city average considering that I am a small company and will not be able to absorb the losses well. Should I bide my time and wait for the supplier prices to fall or should I go ahead and TRY to sell these goods at well above city average?

Additionally, do city averages change with supplier trends, or are they relatively fixed?

Any help would be great.

Thanks,

DaBat!

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7.06.2010, 20:12

RockWhiter

Yes DaBat, that is exactely the thing, that is what I understood too.

Calculation of tax payments
Revenues 648 086.00$
Prime cost expenses 352 201.93$
Taxable profit 295 884.07$
Corporation tax (30.00 %) 88 765.22$
Total 88 762.16$ (considering benefits)

The Prime cost expenses seems to be = (number of good1 sold X purchasing price good1)+(number of good2 sold X purchasing price good2)+...

We don't have the detail of the Prime cost expenses, you can just find the global figure, and it is not related to the other ones.

You have a negative income if you are buying too much (bad) or if you are increasing your supply drastically because you think you can sell more (not that bad). In the 2nd case you should recuperate your investment the next day. But just increasing the supply little by little works too, because you are not sure to be able to double your sales volume.
Be carefull also if you are doing the "first profit" quest Very we!

...

8.06.2010, 04:31

spring_onions

RockWhiter
You have a negative income if you are buying too much (bad) or if you are increasing your supply drastically because you think you can sell more (not that bad).

That's what we call in business as "anticipation inventory", the building up of stocks for the future.

8.06.2010, 19:00

DaBatThrower

If we could use an inventory costing method for stores that could be displayed like FIFO (First in First Out) or LIFO (Last in Last Out) we could handle these situations much easier. That accompanied with the lack of a detailed cash flow statement makes it a little tricky. You really have to pay attention if you have unstable supply. I don't know how you would keep track of it if you had many stores with erratic supply.

8.06.2010, 22:09

Deira

Thats why most big people use Warehouses, ie. you order every goods from the outside of the company there, and supply your stores from there as well, so then you can instantly see whats going on.

9.06.2010, 01:07. Subject: YES!

light76212001

The modern warehouse technology.

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List of forums -> Questions and answers. Help. -> Store Margins and City Averages

List of forums -> Questions and answers. Help.-> Store Margins and City Averages