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serving4theking
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- Aug 10, 2008
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Let's say you own a business and have $10,000 to spend regularly on new inventory (or product) for your small business, and you have to choose between:
Product A.
PRO:
* You buy it cheap (for example $10 per item) and can sell it for $50 per item. That's 5x profit.
* Always can find wholesalers selling it, never a problem with supply.
CON:
* Each of these $10 items takes up a lot of space.
* The demand is steady but not super.
Product B.
PRO:
* Each unit costs more (for example $100 per item) and you can sell it for $200 per item. That's 2x profit.
* Usually in demand, more so than the $10 items.
CON:
* Sometimes harder time finding from wholesalers.
* Less profit margin.
Now, one could buy 1000 units of Product A and if they all sell, it would produce $50,000. On the other hand, one could buy 100 units of Product B and if they sell, it would produce $20,000.
What percentage of product A and product B would you buy and why?
Product A.
PRO:
* You buy it cheap (for example $10 per item) and can sell it for $50 per item. That's 5x profit.
* Always can find wholesalers selling it, never a problem with supply.
CON:
* Each of these $10 items takes up a lot of space.
* The demand is steady but not super.
Product B.
PRO:
* Each unit costs more (for example $100 per item) and you can sell it for $200 per item. That's 2x profit.
* Usually in demand, more so than the $10 items.
CON:
* Sometimes harder time finding from wholesalers.
* Less profit margin.
Now, one could buy 1000 units of Product A and if they all sell, it would produce $50,000. On the other hand, one could buy 100 units of Product B and if they sell, it would produce $20,000.
What percentage of product A and product B would you buy and why?