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This product can help:

"We supply our products to several customers but one of them accounts for half of our sales volume. This client wishes to increase their purchasing volume but at a lower price and different terms. Should we agree?"

Calculating the Total cost of Products

 

How much money You and Your company have lost over the past year due to improper pricing?

 

Do You know such situation - a large retail chain wants to take a big order, but with "ridiculous" price? Or do You need to go down the price in the tender, but you do not know how much? Or maybe You just put the price of Your products based on the market opportunities without delving how much beneficial such an order is for You?

 

It is good, when a company has an experienced CFO with a long operating time of such calculations. Even better, when the CEO has experience in other industries and can bring useful experience there. However, in most cases, the director of the company in a similar situation just loads calculations to accountant (already overloaded with his current work), or trying to do something to count himself.

 

As a result, the director receives a set of numbers, with whom even accountant gets confused. Also the same director intuitively does not believe in the fact that the costs are counted correctly. As a consequence directors often make the wrong decisions. For example, lowering the price of production below the level of profitability for the company and receiving losses from each item of goods held on the conveyor belt. Or other way around, not using the possibility of reducing prices and missing a potentially profitable deal as competitors correctly considered the possibilities.

 

Certainly, every head of a manufacturing company in this situation at least once have regretted that he is not engaged in just a trade.  It might seem, all so simple for the traders -  there is a specific purchase price, to which margin ratio is added – and no problems. But we in AG Capital have more than once  proved in practice that in the manufacturing business calculation of the total cost can be as quick and efficient as in trading.

 

Already 7 years we have practiced implemention of the automated model for calculating the total cost of production for the manufacturing, wholesale and building companies. Our models take into account the specifics of Your company, the assortment range and the market situation. The most important thing - the cost model of AG Capital gives credibility to the results!

 

Working with the model is easy and simple, not for nothing the basis of the model was developed by our founder Andrew Grigolyunovich, CFA charterholder, 22th of the world ranking number in the competition for the development of such models. You will be able to automatically update on a monthly basis the costs of all Your products. Furthermore, these calculations are ideally suited for the reasoning of the price increase negotiations with the customers.

 

If You want to work with the proper prices and find out how we can help You earn more money – call 29168958 and we will arrange a meeting.

 

Price:

How much money Your company is losing due to improper pricing? How much would You be willing to pay for it to get accurate cost estimates and do not hire a full-time job economist?

 

We are confident that these amounts are several times higher than the investment in the development of cost calculation model - from 2,000 to 5,000 euros (depending on the complexity of the processes). An additional nuance - when developing the model, our specialists will go into to understand the business processes of Your company. It is possible that during the development we will find ways to save and  You will cover Your investments in the model even before its launched!

 

The Functionality of the Model:


• Separation of direct production / sales costs by products (the cost of raw materials, salaries, production personnel, and others);
• Separation of indirect costs by product, in accordance with the principles defined by you, (for example, assigning the uniform mark-up coefficient to variable costs);
• Ability to adjust the separation of fixed costs, depending on the product group. It is very important in certain groups of products where the company faces strong competition and is forced to offer the lowest possible price. In this case, fixed costs may be offset by other product groups;

• Based on calculations made in the preceding paragraphs - calculation of minimum required prices;
• Ability to calculate how the selling price of each product will change when the production / sales volumes change (the calculation of economies of scale);
• Ability to calculate how the  price of each product will change when raw material prices or wage levels change (the calculation of the effects of inflation);
• Ability to compare the minimum required price with current prices, identify problem products and sales channels;
• Automatic data input - data for this service will be automatically exported from the accounting records of the system into the profitability model.