When the buyer knocks your trade spend…

S:   ….and I am offering £50k to support this price promotion, subject to conditions,…

B:   £50k is not very much…

S:   How come?

B:   Like I said, for a company of your size, a drop in the ocean…

S:   How much profit do you think we make?

B:   How should I know?  Lots…

S:   Our Pre-Tax Net Profit is 11%

B:   So?

S:   This means that when I put £50k trade spend on your desk, I need to see incremental sales of £455k before I let go of the money…

B:   That’s your problem…

S    OK, Sunshine, let’s talk about your problem… You think £50k is nothing…?

B:   Agreed!

S:   Your business makes 2.5% Pre-Tax Net Profit, right?

B:    How do you know that?

S:   Companies House online, £1 for the latest Annual Report. See, I’ve invested in you already, we call it preparation…

B:   Wish I had the time to surf the internet… Anyway, so we net 2.5%...

S:   This means that my little £50k is equivalent to giving you extra sales of £2m……

B:    Prove it !

S:    Fine.  Our £50k trade investment comes with no handling costs (except bank charges!!!), so it goes straight to your bottom line. It therefore represents 2.5% of sales, in your business model.

B:   So?

S:    £50k divided by 2.5 and multiplied by 100 gives you sales of £2m, bingo!

Buyer:    What do I have to do?

SuperNAM:  Now you’re talking…..


Adventures of SuperNAM! (11)