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Scenario 1 - Using retailers
I am Akash I supply bathroom sets to Big Chain DIY PLC for £300. They cost me £200 to make. I make £100 for each bathroom set sold.
BIG CHAIN DIY PLC
I am the CEO of Big Chain DIY, I pay £300 for the bathroom sets but sell them for £1000. This makes my company £700 for each bathroom sold
We ordered direct from the "Bathrooms Direct" website and paid £800 instead of £1000 that we would have paid in a shop!
We are Mr and Mrs Johnson, we paid Big Chain DIY £1000 for our new bathroom set.
Scenario 1 - Selling Direct
I decided to set up a website called "Bathrooms Direct.com" to sell the bathrooms direct to customers.
I now sell the bathroom sets for £800 online but they still cost me £200 to make so I now make £600 per bathroom. By cutting out Big Chain DIY PLC I get £500 more profit!
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