When a company develops a website and markets and maintains it online there is a fixed cost for these services provided by the website business optimization services company.

By definition the breakeven analysis is the level of sales (by volume or selling price) at which sales equal cost (no profit, but no loss either).

Website Development Scenario

A company called ABC, Inc. is developing a website to sell the widgets.

The fixed cost of website development marketing and maintenance in the first year is $35,000.00

And the cost of production and distribution known as the "variable costs" of the widgets is $100.00.

Research shows that the market-place puts a $450.00 retail price on the widgets.

The Breakeven Analysis Formula

First you find the difference between the variable cost ($100.00) and the selling price ($450.00) which is $350.00.

Then find the number of units that have to be sold to cover the fixed cost ($35,000.00) then divide $350.00 which equals 100 widgets.

Selling price $450.00

Less variable cost $100.00

Equals = $350.00

Divide Fixed Costs $35,000.00

By $350.00

Widgets to sell to breakeven = 100

When is Profit achieved for website development?

Once the distributor has sold the first 100 widgets he now realizes a profit margin on every widget.

What are fixed costs?

These are costs that exist if you sell one or five hundred items i.e. Web Design, Marketing, Maintenance and PPC Campaign.

What are Variable Costs?

Cost that can increase or decrease depending on volume of units sold - wholesale costs, shipping, labor etc.

This formula discounts the ongoing maintenance and marketing of the website in subsequent years.

At E-Marketing Business Solutions we set these projections at the beginning of our web design proposal and our goal is the return on your investment in less than 24 months.

We strive to use the same analysis in any online advertising campaign to help you see the exact value of your advertising dollars.

You are in the business to make a profit and we provide the data to help you see those results.

We look forward to speaking with you about expanding your business through the internet.

If you are serious about taking your website to the next level, please fill our

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