Business Numbers Didn’t Have to Be This Hard · Chapter 4

Contribution and Product Mix

Contribution is what a sale leaves after its own costs. When something is scarce, the best product is the one that earns most per unit of the scarce thing.

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From the book, Chapter 4. Tess’s range: the small candle has the best margin (71.7%), the large candle the most per sale ($18.40), but the reed diffuser earns $4.17 a minute of her time, about $250 an hour, nearly twice anything she pours.

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