Tuesday, July 07, 2020 3:08:32 PM
Retail returns more cash per unit sold:
Knowing that the COGS for OEM and retail are the same, let's look at the revenue per channel:
Retailing at $29.99
OEM at $5.00, maybe
If COGS was $2 per unit the net revenue would be:
CHANNEL NET REVENUE:
OEM Gross Margin: $3
RETAIL Gross Margin (tryactipatch.com): $27.99
RETAIL Gross Margin (50% paid to the retailer): $13.00
I'd prefer $27.99 or even $13 per unit than $3
Even if $3 per unit (10%) was spent on advertising, I'd still opt for retail as it yields $10 gross net per unit, versus OEM at $3 per unit.
Under proper management BIEL could have been enjoying sales in all three channels.
All of my comments are based on my own due diligence and are only my opinion. Please conduct your own due diligence and research before deciding whether to buy or sell any stock. My posts are for entertainment only.
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