Retail Profits, costs, and choosing products

[opopanax]

I've been playing capitalism 2 since the original game came out. One thing that struck me while I was playing last night is trying to determine why a specific firm wasn't making money.

Unlike most of my games I'm not going heavy into retail. I have a couple of stores really just make a small amount of profit as I'm poking around in other parts of the game. Just trying to do something different. When I look at this one firm, it's consistently making a loss. If I look at each product, I'm making a profit at each one. Now I always thought the Product cost was a total cost of sale for the product: Product Purchase cost + freight cost + employee cost at the retail store. I must be wrong, because every product is making a profit but the firm as a whole is making a loss.

What I can't figure out is how to determine how much profit I need to make to just break even having a retail store. If I'm stuck at say $20,000 selling grape juice but I need $30,000 in product profit just to make having a Purchase -> Sale set up then it doesn't make sense to sell grape juice (at least at that profit margin)

So how do I know how much money I need to make to afford to even be selling anything to begin with? Can I estimate based the number of functional units I have at the store? Does each function unit have a different cost (beyond setup cost)?

Any tips when you are selling product, making a profit - but just not enough? What do you consider when choosing a different product to sell? I've always looked at the supplier, the market saturation, quality and price... and ultimately guess a bit.

[MagnusA]

You have some costs for the firm even if you don't purchase/sell anything. You have costs like monthly upkeep, salaries, training, advertising and maybe some more.

I think the difference between the sales revenue and the purchase costs (including freight costs) must be enough to cover these other costs to break-even on firm level.

[opopanax]

well I'm an non observant idiot. I have no idea why I never noticed before, but ther'es a monthly cost listing when you hover over the store type.

So there's a monthly firm cost which varies depending upon the store. Then there are employee salaries. I did this by starting a new game, building 1 store, and looking at the firm income statement report.

For example, Department Stores monthly is $19,524 a month and General Stores $4,825... roughly. There seems to be some oscillation.

Employee costs:
Advertising: $1,558.00
Inventory: $1,549.00
Private Labeling:$1,544.00
Purchasing: $1,539.00
Sales ; $3,074.00

So to do a department store with 4 Purchase/Sales setup, you would pay $18,488 in employee salary plus maintenance of $19,524 for a total of $38,012. I'm guessing salaries may go up and down based on the city economy. This still doesn't quite address my original question. Based on the firm, across all 4 products I had a total profit of about $100,000... which should mean the firm was making a profit of about $40,000... but it was far below 0. There was no advertising involved. So I'm not sure what's happening and I still have no idea how to decide which product to really choose to give you the best option for a profitable firm. Especially if you're trying to go retail only and not make anything yourself