Types of Costs in Distribution

If you don't manage your expenses in sales, you can't understand where the profit went.

Costs in distribution can be grouped into the following types.

Direct costs

If there is no trade, these costs do not occur either.

• Cost of goods

• Delivery

• Interest and bonuses from sales

• Packaging and accessories

Fixed costs

These exist regardless of whether there is a sale or not.

• Office rent

• Salaries (administrator, accountant, management)

• CRM, internet, and utilities

• Depreciation (equipment, furniture)

Variable costs

These change depending on the volume of sales.

• Fuel and logistics

• Courier services

• Returned goods

• Discounts and promotions

Marketing expenses

These are spent on attracting customers.

• Advertising on Instagram and Google

• Bonuses and discounts

• Promotions and tastings

• Branding materials

Financial expenses

These relate to banking and the circulation of money.

• Credit interest

• POS terminal commissions

• Foreign exchange losses

• Cash collection

IT and automation costs

These are an integral part of the business.

• CRM, 1C, and other software

• Licenses and technical support

• Online monitoring and reporting systems

What is the benefit of grouping costs?

• Each cost source is clearly visible

• You see where most of the money goes

• You can calculate net profit

• Decision-making becomes much easier