Sample Cookbook Production Quote 2: Financial Analysis

Let's say that you are interested in producing a cookbook with specifications like the one in our example. Based on the analysis below, we can make the following conclusions:

  • For sales of 6,000 books, your total potential profit is $82,472.  
  • For sales of 5,000 books, your total potential profit is $66,476.
  • For sales of 4,000 books, your total potential profit is $50,061.

 Quantity 

 

        4,000

         5,000

      6,000

 

 % direct to consumer 

60%

        2,400

         3,000

      3,600

 

 % to retail stores 

10%

           400

            500

        600

 

 % to wholesalers 

30%

        1,200

         1,500

      1,800

 

 

 

 

 

 

 Unit cost 

 

 $       7.32

 $        6.54

 $     6.09

 

 

 

 

 

 

 Suggested selling price 

 

 

 

 

 

 Full retail (direct to consumer) 

        24.95

         24.95

      24.95

 

 % discount to retailers 

40%

        14.97

         14.97

      14.97

 

 % discount to wholesalers 

55%

        11.23

         11.23

      11.23

 

 

 

 

 

 

 Total gross revenues 

 

      79,341

       99,176

   119,012

 

 

 

 

 

 

 Total investment 

 

      29,280

        32,700

    36,540

 

 

 

 

 

 

 Total profit potential 

 

      50,061

        66,476

    82,472

 

 

 

 

 

 

 Return on investment 

 

171%

203%

226%

 

 

 

 

 

 

 Breakeven quantity 

 

        1,476

         1,649

      1,842


This analysis is for illustrative purposes only. The exact sales mix will depend on your distribution and marketing approach. Actual required discounts and terms may vary among retailers and distributors.

 

 

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