Mark is asking Tim what the biggest expense is for an eCommerce business. For context, Tim is a communications manager for a sporting goods eCommerce business that generates about $35 million in annual sales, with throughput of approximately $21 million.
Tim: (stalling) Labor?
Mark: No.
Tim: Oh, okay, it has to be our product, right?
Mark: Is that a question or an answer?
Tim: Our product, cost of goods sold—I know that’s right.
Mark: No.
Tim: I give up. What is it?
It’s somewhat of a trick question, although the answer sounds plausible until one tries to figure out the math, which is nearly impossible. Yet, the answer is thought-provoking and generally leads to new actions to improve eCommerce financial performance.
Tim could not figure out the right answer. Can you?
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