Larger volume better rates....well thats genious! C'mon DB.
Running an Apparel business is like running an event management company....can be a major pain in the butt. Have reps running all over the place promoting, promoting, promoting.
Have you ever seen a bunch of "sales reps/groupies" running around promoting, promoting,...? supplements or apparel?
At this point MSLP may have decided to use this 250K to pay their CASH salaries thus keeping this from further affecting Cash flow of MSLP. It could be a way of setting the 2 businesses apart so that MSLP supplements is a business that should be recorded as self-sustaining?
Further more I had previosly posted an example from my experience as to when something is worth the time and money.
Labor = time & Money
My Example: My company : Lets say the following: Per $100.00 in revenue(1 hour labor needed when using my asset) & (.25 hours of labor when outsourcing)
Asset sits unused = cost $500.00 per month (no labor)
vs.
Don't have asset(sold it, therefore outsource) = 20% profit of all revenue (at 500 revenue I make $100.00 in 1.25 hours of work)
Asset in use (revenue to breakeven) = $4k Revenue (meaning 40 hours of labor just to break even.)...however after I break this point I my margins improve to 35%.
-------------------------------------
Don't have asset (outsource)20K revenue: 4K Profit in 50 hours of labor....Not to bad huh?
vs.
Asset in use (in-house) 20K revenue: First 4K ($0.00 / nothing with 40 hours of labor) + 16K revenue at 35% =$5600.00 Profit with 160 hours of labor)
Now which looks better: 4K Profit on 50 hours of labor or $5600.00 on 200 hours of labor?
Now I will admit my business is very labor intensive, but not all is what you think untill you deal with that many digits....don't assume you can value their time which = money...
Now I'm NOT saying they have made the best deal,,, but they may have based on their current situation....because thes numbers I showed will be greatly skewed once the Revenue starts hitting 6 digits... but why in the meantime until these numbers demand your time and money would you not limit your responsibilites ans risks?
Oh and by the way..I take all their recent actions from NSF to the website recontruction as being more effiecient! And I'm all for this!!
MSLP retail long
