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Average Order or
Single Product Breakeven Analysis Tool
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You can use this
calculator to determine the breakeven for an average order for a campaign
that includes multiple products, or for a single item breakeven where you
know the promotional and fulfillment costs for the individual product.
Enter the data in the cells below. The calculator returns the breakeven
percentage and the responses required to attain that percentage based on your
average order value and the estimated advertising and other costs for this
promotion. This is a simple breakeven
calculator and only gives you a ball park estimate of the breakeven response
and orders required. If you're not
sure of the order related fulfillment and order processing costs, leave those
blank. Without them, this is a good
guide because if it can't achieve breakeven without those other costs, it
won't achieve breakeven with them included.
You may reset all factors to "0" to start over or when you are
finished using the tool by clicking the RESET button at the bottom. You save a PDF copy of this analysis by clicking
the PRINT button at the bottom. You
can also save the evaluation to your browser if you're not able to complete
it in one sitting. Just save the
results, then open the file later.
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General Program Parameters
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Enter the total promotional
costs (for item or campaign)
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Enter total audience, mailing
quantity or circulation
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Enter the Average Order
Merchandise Value (or value for single product)
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Enter the Gross Margin Percent
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%
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Fulfillment & Order
Processing Related Costs
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Returns % (Enter campaign
average returns % for this product or campaign if more than one product. This % may vary from 10 to 100% depending
on the product and product category.)
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%
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Bad Debt % (Enter campaign
average bad debt %. This figure may
also vary by product category.)
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%
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Credit card discount rate
(Enter discount rate %.)
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%
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Credit card processing fee
(Enter the processing fee %.)
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%
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Fulfillment Costs Per Order
(Warehousing, Picking & Packing, Supplies, Order Processing, Etc.) *
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Actual Outbound Shipping Costs
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Postage/Shipping/Handling Costs
Billed to Customer
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Total Order Parameters
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Total Order Value
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Total Order Costs
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Total Margin $'s (if the total
margin $'s are zero or a negative amount, you will not be able to achieve
breakeven no matter how many of these orders or products you ship.
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Breakeven percentage required
based on the average order value and gross margin percentage entered.
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Breakeven orders required
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Note: The breakeven is
the response rate required for the margin $'s generated from all sales to
cover total advertising and other costs for the promotion.
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