Not to be a nitpicker, but there's a somewhat egregious math error in Alice's example projection:
Number of people who visit your website/listing x the % of those visitors that purchase from you x how much money you make per sale x average number of transactions from each customer = your gross profit.
Right, but ...
For example, letâ€™s say I sell wall calendars and 100 people come to my website or my listings every day. If I convert 20% of those people, I make 20 sales. If I sell each wall calendar for $10, I turnover $200 per day. If each customer buys from me on average 2 times in their lifetime, my gross profit would be $400/day or $146,000/year.
I don't know about you but I could sure do with an extra $146,000 per year!
Turnover â‰ gross profit, and gross profit â‰ income, and lifetime â‰ year.
If calendars are being sold at $10, and she pays say $5 for them (just to make the math simple) then her average gross profit per day is $100, or $36,525 a year. Minus selling fees,postage, storage, hosting, promotions, supplies, help, and all the other myriad costs associated with running the sort of business that could fulfull more than seven thousand orders a year, which is a prety serious full time effort for one person to try to handle on his own.
I understand that the example was just kind of "napkin math" used to illustrate the example, but conflating profit with sales and repeat sales with recurring sales make for dangerous results when trying to teach people new to the business.