Direct vs indirect

Direct vs indirect

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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.
  • 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" 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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