Understanding Unit Costs in Online Selling

This video tutorial introduces the concept of unit cost in online selling, emphasizing its importance for profitability. It explains how to calculate unit cost using an example and highlights the need to consider additional costs like postage, packaging, and taxes. The video also discusses profit margins and the importance of pricing products above the unit cost to ensure profitability. Finally, it encourages viewers to subscribe for more tips on selling and marketing products online.

Why is understanding unit cost crucial for online sellers?

• It helps in customer service.

• It is necessary for product design.

• It is required for tax calculations.

• It helps in determining the selling price.

What is the basic formula for calculating unit cost?

• Total cost divided by number of units.

• Total sales divided by number of units.

• Total revenue divided by number of units.

• Total profit divided by number of units.

If a product costs £300 for 100 units, what is the unit cost?

• £3

• £300

• £0.30

• £30

Which of the following is considered an additional cost in online selling?

• Postage cost

• Employee salary

• Utility bills

• Office rent

How does packaging cost affect unit cost?

• It doubles the unit cost.

• It has no effect on unit cost.

• It decreases the unit cost.

• It increases the unit cost.

What is importation tax?

• A tax on local sales.

• A tax on exported goods.

• A tax on imported goods.

• A tax on digital products.

How do platform fees impact unit cost?

• They are refunded to the seller.

• They decrease the unit cost.

• They increase the unit cost.

• They have no impact on unit cost.

What is a profit margin?

• The difference between selling price and unit cost.

• The total revenue from sales.

• The total cost of production.

• The total number of units sold.

Why should sellers calculate unit cost before purchasing products?

• To ensure profitability.

• To avoid overstocking.

• To improve customer satisfaction.

• To comply with regulations.

What should sellers do if their unit cost is higher than the market selling price?

• Decrease the selling price.

• Increase the number of units.

• Increase the unit cost.

• Avoid selling that product.