Market rules for judging the profitability of a business

At the end of January, Dangdang announced a high-profile announcement of its December 2007 modest profit. Dangdang related responsible person thinks, this means Dangdang last year overall realizes three digit growth, has already crossed the profit threshold ahead of time.

Bezos Amazon, it took seven years to enter the profit phase. Dangdang was officially launched from November 1999, and by December 2007, it used almost seven year. Maybe it's a coincidence-marriage is usually a "seven-year itch," and it's usually a seven-year profit?

I read this news article very carefully, a few questions did not read:

1, this December profit, is the accounting standards, usually said "break Evan" point? That is, after that, every month is profitable?

2, or, just December, reached the "income" expenditure, is "gross margin" profit? In the months that followed, there could still be a situation of no profit, that is, "income"?

On this part, also expect Dangdang will give more answers in the future.

Dangdang announced the profit, I also received a lot of reporters friends, the industry tongren consultation, about my views on this issue and so on. In addition to the "Why Red children make money, when and outstanding loss", I have not been "harmony". So, to sum up the "market rules for the profitability of a business", answer everyone's questions.

The law has three formulas, not complicated, do not see the formula on the headache:

1. Gross income = gross profit margin;

2, the market expenditure = Single user to obtain the cost * Day user number * 365 days;

3, each transaction amount = Total sales/365 days/day user number;

Here the "number of days", refers to the user orders and the number of transactions; here also do not consider the freight Ah, staff wages Ah, server bandwidth, such as a series of operational issues.

Take Dangdang/Excellence network Common, to illustrate it, I believe you read it all understand:

If the 2007 Dangdang sales are 500 million, the average gross margin of book/audio-visual/Film/department/Digital/Cosmetics is 20%, then:

2007 Gross income = 500 million *20%=1 billion

No matter when, or outstanding, every year will do two things: A, shopping coupons, B, market advertising. Whether it is "buy 100 yuan to 20 yuan", or each other in Baidu's high advertising, are to achieve "user access." Therefore, we assume that the cost per user is 20 Yuan, Dangdang 10,000 users per day shopping, then:

2007 Market Expenditure = 20 Yuan * 10,000 * 365 days = 73 million yuan

With the above numbers:

Each transaction amount = 500 million/365 days/10,000 = 137 yuan

So the question is so easy to "judge the market law of the profitability of a business":

1, a higher margin, a single user to obtain a lower cost, on the profit. Dangdang or excellent network, have their own financial tipping point. For example: less than 15% gross margin products, resolutely do not do; For example: more than 25 yuan per user to obtain the cost of the market, let Taobao first to education, anyway Ali Dad listed, money ... And so on;

2, look at yourself, every time shopping to reach 137 yuan? If not, you must not be a VIP, you must not enjoy folding ... ；

So why do people say that it's hard to do, but they all break their heads and squeeze in? Because:

1, Jingdong Mall, Colorful Valley, red children, and so on, each transaction amount is close to thousand yuan;

2, Beidou mobile phone network, watch nets, No5, and so on, http://www.aliyun.com/zixun/aggregation/17231.html "> Part of the merchandise, gross margin of more than 35%;"

3. ...........

Therefore, Dangdang began to make shirts, high-island cotton shirts 3 pieces 398 yuan, excellent network began to sell nutritional supplements, calcium added good film, good deposit of good, all only sell 90 yuan!