RE: SYME Cost Base4 Oct 2020 13:45
Havoc3852,
Working with the 2% figure and 1% profit, we will also see other revenue streams (for instance proc fee from the insurance).
As profit is due to economy of scale in the sense that the stock in inventory will need to be a minimum value "X"millions before it is worth SYME looking at arranging the trade!
So, the way I see it, it is actually cheap for SYME to deal with a company with an inventory of say £50m than a company with an inventory of say £20m
This is because the work will be similar with small variable such as cost of storage.... That would be made up for in the proc fee received from the insurance (for instance) in addition to having relatively fixed costs, the volume is where the profit lies and with a net profit of 1%, you can quickly see why this is important