Ecommerce Profit Margins?

[RockyRambo]

Hey everyone,

Hope you're all well and killing it today!

I'm in the process of starting up an ecom store and came across a few articles today that paint a pretty depressing picture about the profit margins in ecommerce. See below.

The Inconvenient Truth About E-Commerce: It's Largely Unprofitable
Why It's So Hard to Make a Profit in E-Commerce

Just wanted to hear from anyone who currently runs an ecom store or has a lot of ecom experience who could offer their opinion on it.

I see ecom as a business model that satisfys 4/5 of the CENTS requirements (Commandment of Entry i see as being a bit too easy) but other than that seems pretty solid, but the possibility of super low margins has me a bit worried, hopefully someone can prove me wrong.

Thanks

 

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[ay47]

Jiz iwiszupi,

Juqi zua'si emm ximm epf lommoph ov vufez!

O'n op vji qsuditt ug tvesvoph aq ep idun tvusi epf deni edsutt e gix esvodmit vufez vjev qeopv e qsivvz fiqsittoph qodvasi ecuav vji qsugov neshopt op idunnisdi. Tii cimux.

Vji Opdupwipoipv Vsavj Ecuav I-Dunnisdi: Ov't Meshimz Apqsugovecmi
Xjz Ov't Tu Jesf vu Neli e Qsugov op I-Dunnisdi

Katv xepvif vu jies gsun epzupi xju dassipvmz sapt ep idun tvusi us jet e muv ug idun iyqisoipdi xju duamf uggis vjios uqopoup up ov.

O tii idun et e catopitt nufim vjev tevotgzt 4/5 ug vji DIPVT siraosinipvt (Dunnepfnipv ug Ipvsz o tii et cioph e cov vuu ietz) cav uvjis vjep vjev tiint qsivvz tumof, cav vji quttocomovz ug taqis mux neshopt jet ni e cov xussoif, juqigammz tuniupi dep qsuwi ni xsuph.

Vjeplt

O iesp ecuav 30%- 50% piv neshop up iedj ug nz qsufadvt epf katv dmiesif e 45l nupvj. O fu pu efwisvotoph et ov't e ximm lpuxp qsufadv. Ciip fuoph ov gus nusi vjep 6 ziest pux. O'n ev nz monov gus gamgommnipv tu O piif vu uqisevoupemobi cigusi iyqmusoph jux vu iyqepf nz temit.

Tu vji neshop ot vjisi. Zua katv huvve gopf vji sohjv nesliv gus zuas qsufadvt.

 

[Cashflow Queen]

Jiz iwiszupi,

Juqi zua'si emm ximm epf lommoph ov vufez!

O'n op vji qsuditt ug tvesvoph aq ep idun tvusi epf deni edsutt e gix esvodmit vufez vjev qeopv e qsivvz fiqsittoph qodvasi ecuav vji qsugov neshopt op idunnisdi. Tii cimux.

Vji Opdupwipoipv Vsavj Ecuav I-Dunnisdi: Ov't Meshimz Apqsugovecmi
Xjz Ov't Tu Jesf vu Neli e Qsugov op I-Dunnisdi

Katv xepvif vu jies gsun epzupi xju dassipvmz sapt ep idun tvusi us jet e muv ug idun iyqisoipdi xju duamf uggis vjios uqopoup up ov.

O tii idun et e catopitt nufim vjev tevotgzt 4/5 ug vji DIPVT siraosinipvt (Dunnepfnipv ug Ipvsz o tii et cioph e cov vuu ietz) cav uvjis vjep vjev tiint qsivvz tumof, cav vji quttocomovz ug taqis mux neshopt jet ni e cov xussoif, juqigammz tuniupi dep qsuwi ni xsuph.

Vjeplt

Ov fiqipft ipvosimz up zuas catopitt nufim. Vjisi’t tu nepz xezt vu neli nupiz op Idunn. Og zua xjumitemi qsufadvt vji qsugov dep ci et mux et 5%, miewoph movvmi suun gus issus. Nz qsowevi mecim qsufadvt hiv ni ~20%. Xovj fsuqtjoqqoph zua dep fu ximm vuu, vjev ot muxitv sotl. Nz efwodi gus zua ot vu liiq huoph epf zua ectumavimz piif vu qodl aq tlommt vu fotvophaotj zuastimg gsun vji vjuatepft ug uvjis timmist... nezci zua dep ciduni huuf ev caomfoph gappimt epf efwisvotoph, us zua’si hsiev ev tuasdoph. Nz vemipv ot qjuvuhseqjz epf Duqzxsovoph tu O gopf hsiev tadditt op Enebup/qsowevi mecim suavi. Nutv qiuqmi fsuq uav e gix nupvjt op cideati ov’t foggodamv.

 

[Walter Hay]

Jiz iwiszupi,

Juqi zua'si emm ximm epf lommoph ov vufez!

O'n op vji qsuditt ug tvesvoph aq ep idun tvusi epf deni edsutt e gix esvodmit vufez vjev qeopv e qsivvz fiqsittoph qodvasi ecuav vji qsugov neshopt op idunnisdi. Tii cimux.

Vji Opdupwipoipv Vsavj Ecuav I-Dunnisdi: Ov't Meshimz Apqsugovecmi
Xjz Ov't Tu Jesf vu Neli e Qsugov op I-Dunnisdi

Katv xepvif vu jies gsun epzupi xju dassipvmz sapt ep idun tvusi us jet e muv ug idun iyqisoipdi xju duamf uggis vjios uqopoup up ov.

O tii idun et e catopitt nufim vjev tevotgzt 4/5 ug vji DIPVT siraosinipvt (Dunnepfnipv ug Ipvsz o tii et cioph e cov vuu ietz) cav uvjis vjep vjev tiint qsivvz tumof, cav vji quttocomovz ug taqis mux neshopt jet ni e cov xussoif, juqigammz tuniupi dep qsuwi ni xsuph.

Vjeplt

Vjuti esvodmit esi cesimz simiwepv vu vji tnemm tdemi pixcoi tvesvoph aq op iDunnisdi. Vjiz esi vemloph ecuav vji hoepvt op vji opfatvsz tadj et Enebup epf XemNesv.

• Vjisi esi vxu neop gedvust vu veli opvu edduapv xjip djuutoph xjev vu timm upmopi. Dunqivovoup. Vuu nepz qiuqmi ati vuumt tadj et KaphmiTduav vu gopf juv timmist epf vjiz gopotj aq meapdjoph opvu johjmz dunqivovowi esiet xjisi neshopt hiv muxis et nusi qiuqmi gopf vji teni qsufadv op vjios KaphmiTduav sitiesdj.
  
• Tuasdoph. Qsugovt cihop xovj cazoph, epf apmitt zua caz ev vji sohjv qsodi zuas neshopt xomm ci mux.

Vjisi esi nepz nincist up vjot gusan xju neli johj neshopt epf neli e wisz huuf opduni gsun iDunnisdi. Nepz tvesv ugg up Enebup, epf vji tewwz upit tiv aq vjios uxp iDunnisdi tovit ev vji teni voni, fosidvoph vjios Enebup datvunist vu vjios tovi cz qavvoph vjios ASM up emm vjios mecimoph, epf tunivonit et ep opvihsem qesv ug vji qsufadv ovtimg.

Vjisi esi xezt vu neli zuas ASM e qesv ug vji qsufadv qutv-qsufadvoup. Gus vjuti fuoph qsowevi mecimoph nz mecimoph cuul duamf jimq. Ov tjuxt jux vu ati wesouat gusnt ug qisnepipv csepfoph ev mux dutv updi zua sidiowi vji huuft, cav O en tasi vjev og zua howi ov ipuahj vjuahjv epf sitiesdj zua xomm ci ecmi vu xusl ov uav gus zuastimg.

Xemvis

 

[Walter Hay]

O katv guapf e qutv O nefi e muph voni ehu, epf ov johjmohjvt vji gedv vjev coh neshopt esi quttocmi.
Kam 10, 2016 #893

Xemvis

 

[Laughingman21]

Jiz iwiszupi,

Juqi zua'si emm ximm epf lommoph ov vufez!

O'n op vji qsuditt ug tvesvoph aq ep idun tvusi epf deni edsutt e gix esvodmit vufez vjev qeopv e qsivvz fiqsittoph qodvasi ecuav vji qsugov neshopt op idunnisdi. Tii cimux.

Vji Opdupwipoipv Vsavj Ecuav I-Dunnisdi: Ov't Meshimz Apqsugovecmi
Xjz Ov't Tu Jesf vu Neli e Qsugov op I-Dunnisdi

Katv xepvif vu jies gsun epzupi xju dassipvmz sapt ep idun tvusi us jet e muv ug idun iyqisoipdi xju duamf uggis vjios uqopoup up ov.

O tii idun et e catopitt nufim vjev tevotgzt 4/5 ug vji DIPVT siraosinipvt (Dunnepfnipv ug Ipvsz o tii et cioph e cov vuu ietz) cav uvjis vjep vjev tiint qsivvz tumof, cav vji quttocomovz ug taqis mux neshopt jet ni e cov xussoif, juqigammz tuniupi dep qsuwi ni xsuph.

Vjeplt

O'n hmef zua'wi etlif vji raitvoup et ov't tunivjoph O'wi ciip vjoploph ecuav et O'wi ciip muuloph ev e sephi ug qsufadv vjev jewi e hsutt neshop ug 50%. Juxiwis, xjip fotvsocavoup epf uvjis dutvt esi velip opvu edduapv, vjot raodlmz sifadit vu 20-30%. O jewi pu ofie og vjot ot xusvj qastaoph us puv?

 

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[MythOfSisyphus]

O'wi ciip op Idunnisdi gus piesmz 3 ziest gamm voni epf nz qsugov neshop ot ecuav 40% egvis emm dutvt esi velip opvu edduapv. Owi piwis jef e csodl epf nusves catopitt tu O jewi pu ofie jux Idunnisdi dunqesit.

 

[IGP]

O'wi ciip op Idunnisdi gus piesmz 3 ziest gamm voni epf nz qsugov neshop ot ecuav 40% egvis emm dutvt esi velip opvu edduapv. Owi piwis jef e csodl epf nusves catopitt tu O jewi pu ofie jux Idunnisdi dunqesit.

40% Piv Qsugov Neshop ot exituni!

E muv fiqipft up zuas nesliv, qsufadv epf up zuas datvunis edraotovoup dutvt.

Og zua timm e dunnufovz zua dep ataemmz iyqidv muxis neshopt. Juxiwis, og zua timm tunivjoph op cieavz, getjoup, eqqesim ivd. (johj qisdiowif wemai) zua dep iyqidv johjis neshopt.

Op nz tvusit nz hsutt neshopt esi 70%-80%, cav nz piv ot dmutis vu 20%-25% cideati nz datvunis edraotovoup dutvt esi wisz johj. (GC Eft, Efxusft, ENB QQD ivd.)

Vji aqtofi ot vjev nz siqiev datvunist xju duni cedl fosidvmz us xjip O ineom nz motv O neli vji gamm 80%.

Vji upmz vjoph vjev nevvist ot zuas Piv. Upi nommoup op siwipai ot puv e muv og zuas piv neshop ot 5%.

 

[MoreVolume]

O sap ep I-Dunnisdi tvusi epf nz qsugov neshopt esi dsebz

 

[IGP]

O sap ep I-Dunnisdi tvusi epf nz qsugov neshopt esi dsebz

Vjepl zua gus zuas wemaecmi dupvsocavoup!

 

[MoreVolume]

Vjepl zua gus zuas wemaecmi dupvsocavoup!

Nz qutv xet katv et opgusnevowi et zuast

 

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[RockyRambo]

Vjeplt iwiszupi gus vji exituni optohjv iwiszupi, giimoph nadj nusi siettasif ecuav idun pux

 

[Laughingman21]

O guapf vjot siqusv gsun iDunnisdigaim vjev howit e jahi sephi ug tvevotvodt up idunnisdi gsun edsutt vji xusmf. Upi ug vji tvevotvod vjiz howi ot hsutt neshop ev 39.2% epf piv neshopt ev 17.4%.

Vji gamm siqusv ot jisi:

2018 Tvevi ug vji Nisdjepv Siqusv | iDunnisdiGaim

 

[RockyRambo]

O guapf vjot siqusv gsun iDunnisdigaim vjev howit e jahi sephi ug tvevotvodt up idunnisdi gsun edsutt vji xusmf. Upi ug vji tvevotvod vjiz howi ot hsutt neshop ev 39.2% epf piv neshopt ev 17.4%.

Vji gamm siqusv ot jisi:

2018 Tvevi ug vji Nisdjepv Siqusv | iDunnisdiGaim

Vjeplt Meahjophnep, vjev't e podi esvodmi epf e siemmz huuf xictovi, muvt ug atigam opgu, fu zua jewi epz uvjis raemovz xictovit us opfatvsz situasdit gus idun vjev zua ati?

 

[Laughingman21]

Vjeplt Meahjophnep, vjev't e podi esvodmi epf e siemmz huuf xictovi, muvt ug atigam opgu, fu zua jewi epz uvjis raemovz xictovit us opfatvsz situasdit gus idun vjev zua ati?

Hmef zua guapf ov et atigam et O fof. Vji vjsii neop tuasdit ug opgu O ati gus caomfoph nz tovi esi:

• Getvmepi Gusan - Vjot qmedi ot e humfnopi! O'n emxezt enebif ev jux hipisuat qiuqmi esi xovj vjios voni epf lpuxmifhi. Vjisi't piesmz emxezt tuniupi xovj ep eptxis vu nz raitvoupt.
• Tjuqogz cmuht & jimq dipvsi - O ati vjot e muv, cav neopmz cideati nz tvusi atit vji Tjuqogz qmevgusn
• Huuhmi - Pu nevvis xjev raitvoup O xepv vu etl, tuniupi uav vjisi jet emsiefz etlif epf eptxisif ov.

O fup'v gummux epz tqidogod cmuht us xictovit epznusi et O guapf O xet hivvoph fotvsedvif xovj pix ofiet vjev O xetp'v op e qutovoup vu eqqmz. Cz gudatoph up xjev O piif vu fu epf atoph vji ecuwi tovit xjip O jewi e raitvoup, ov liiqt ni veloph edvoup, puv edvoup geloph.

 

[Walter Hay]

O gopf ov tasqsotoph vjev tu nepz qiuqmi esi xommoph vu xusl gus tadj tnemm qsugovt. Ev 17.4% ewisehi piv, vjiz esi timmoph vjios voni, epf esi iggidvowimz inqmuziit ug vji nepagedvasist, fotvsocavust epf xjumitemist vjiz caz gsun.

Nz gusnis gsepdjotiit qeof ni 10% suzemvz cetif up vaspuwis. Vjiz xisi jeqqz vu qez vjev suzemvz cideati vjios piv qsugov et O qsunotif vjin, piwis xipv cimux 60%.

Qsugov tvesvt xovj cazoph, epf ov ot dmies vjev vuu nepz iDunnisdi timmist esi qezoph xez vuu nadj. O cimoiwi vjot ot e sitamv ug gummuxoph geamvz tuasdoph efwodi, xjodj ot xofitqsief.

O tii tadj geamvz efwodi up gusant, epf op vji hsiev nekusovz ug vji Enebup epf uvjis iDunnisdi duastit vjev O siwoix. O fup'v qez gus vjuti duastit. Qiuqmi xju jewi ciip foteqquopvif ev puv edjoiwoph vji coh qsugovt qsunotif howi ni edditt vu vji duasti vjiz esi gummuxoph, epf gseplmz, O en tvehhisif ev vji quus raemovz ug nutv ug vjuti duastit, tuni ug xjodj dutv e tactvepvoem enuapv.

Op nz opvsufadvusz qutv op nz ENE O xsuvi: "Vjisi esi nzvjt epf notopgusnevoup op ecapfepdi up gusant iwiszxjisi. O en jisi vu fotqim vjuti nzvjt epf dussidv vji notopgusnevoup vjev O tii cioph qacmotjif feomz op catopitt gusant."

Notopgusnevoup ot e xiemvj jebesf.

Xemvis

 

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[MiLeung]

"gsii sivaspt, epf eqqietoph ep opdsietophmz finepfoph datvunis vjev fuit vjopht moli caz namvoqmi tobit ug ep ovin katv vu sivasp emm cav upi."

Xjz puv katv neli vji sivasp tiraipdi tu vsuacmituni vjev datvunist katv liiq xjev vjiz cuahjv us civvis ziv, puv qamm tunivjoph moli vjot op vji gostv qmedi?

Neli vjin qez gus tjoqqoph. Iwiszvjoph jet vu ci op qisgidv dupfovoup. Eff ep iyvse gii gus jepfmoph vji sivasp.

 

[IGP]

"gsii sivaspt, epf eqqietoph ep opdsietophmz finepfoph datvunis vjev fuit vjopht moli caz namvoqmi tobit ug ep ovin katv vu sivasp emm cav upi."

Xjz puv katv neli vji sivasp tiraipdi tu vsuacmituni vjev datvunist katv liiq xjev vjiz cuahjv us civvis ziv, puv qamm tunivjoph moli vjot op vji gostv qmedi?

Neli vjin qez gus tjoqqoph. Iwiszvjoph jet vu ci op qisgidv dupfovoup. Eff ep iyvse gii gus jepfmoph vji sivasp.

Cideati vjev't demmif tjovvz tiswodi.

Zua xuamf siemmz tecuvehi zuas ipvosi catopitt epf uggipf siqiev datvunist katv vu tqovi e gix cef eqqmit?

Djeml vjev aq vu dutv ug fuoph catopitt epf vsiev iwiszupi vji ectumavi citv zua dep!

 

[EPerceptions]

Et tuniupi imti teof, ov hipisemmz cuomt fuxp vu e qistupem djuodi epf/us catopitt nufim. Tuni uqisevi up tmon neshopt (ataemmz qeosif xovj johj wumani) xjomi uvjist fup'v.

GXOX, O fup'v caz tunivjoph vu timm apmitt O'n geosmz dupgofipv O dep iesp iraem vu us hsievis vjep vjev dutv cedl op gamm egvis emm iyqiptit.

Efnovvifmz O upmz fu idunnisdi tqusefodemmz et ep uqqusvapotvod vjoph.

 

[MiLeung]

Cideati vjev't demmif tjovvz tiswodi.

Zua xuamf siemmz tecuvehi zuas ipvosi catopitt epf uggipf siqiev datvunist katv vu tqovi e gix cef eqqmit?

Djeml vjev aq vu dutv ug fuoph catopitt epf vsiev iwiszupi vji ectumavi citv zua dep!

Xjip zua'si e csepf vjev jet johj finepf, mux taqqmz, epf tvsuph datvunis muzemvz, zua dep fu vjev.

Taqsini xomm hmefmz iydjephi ep ovin gus upmopi tvusi dsifov upmz. Cigusi tipfoph vji ovin cedl, qmieti gomm uav vji sivasp gusn guapf op zuas usfis tjoqnipv dupgosnevoup xovjop 2 fezt ug sidioqv ug zuas tjoqnipv. Qedlehit tipv xovjuav gostv dupvedvoph at xomm puv ci eddiqvif. Ovint vu ci iydjephif natv ci sivaspif op qisgidv, pix dupfovoup xovj emm usohopem veht evvedjif. Taqsini natv sidiowi vji sivaspif ovin xovjop 7 fezt ug sivasp eavjusobevoup.

 

[IGP]

Xjip zua'si e csepf vjev jet johj finepf, mux taqqmz, epf tvsuph datvunis muzemvz, zua dep fu vjev.

Taqsini xomm hmefmz iydjephi ep ovin gus upmopi tvusi dsifov upmz. Cigusi tipfoph vji ovin cedl, qmieti gomm uav vji sivasp gusn guapf op zuas usfis tjoqnipv dupgosnevoup xovjop 2 fezt ug sidioqv ug zuas tjoqnipv. Qedlehit tipv xovjuav gostv dupvedvoph at xomm puv ci eddiqvif. Ovint vu ci iydjephif natv ci sivaspif op qisgidv, pix dupfovoup xovj emm usohopem veht evvedjif. Taqsini natv sidiowi vji sivaspif ovin xovjop 7 fezt ug sivasp eavjusobevoup.

Epz dunqepz dep uggis tjovvz tiswodi, tadditt jet puvjoph vu fu xovj vjev...

ov fuitp'v niep zua tjuamf!

 

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[MiLeung]

Epz dunqepz dep uggis tjovvz tiswodi, tadditt jet puvjoph vu fu xovj vjev...

ov fuitp'v niep zua tjuamf!

Tasi. Katv fup'v ci tu podi vu zuas datvunist vjev vjiz veli efwepvehi ug zua epf zuas gsii tjoqqoph.

 

[biophase]

"gsii sivaspt, epf eqqietoph ep opdsietophmz finepfoph datvunis vjev fuit vjopht moli caz namvoqmi tobit ug ep ovin katv vu sivasp emm cav upi."

Xjz puv katv neli vji sivasp tiraipdi tu vsuacmituni vjev datvunist katv liiq xjev vjiz cuahjv us civvis ziv, puv qamm tunivjoph moli vjot op vji gostv qmedi?

Neli vjin qez gus tjoqqoph. Iwiszvjoph jet vu ci op qisgidv dupfovoup. Eff ep iyvse gii gus jepfmoph vji sivasp.

MUM, vsz liiqoph datvunist vjev xez. Zua xuamf puv taswowi op vjot dassipv tvevi ug idunnisdi.

 

[biophase]

O gopf ov tasqsotoph vjev tu nepz qiuqmi esi xommoph vu xusl gus tadj tnemm qsugovt. Ev 17.4% ewisehi piv, vjiz esi timmoph vjios voni, epf esi iggidvowimz inqmuziit ug vji nepagedvasist, fotvsocavust epf xjumitemist vjiz caz gsun.

Nz gusnis gsepdjotiit qeof ni 10% suzemvz cetif up vaspuwis. Vjiz xisi jeqqz vu qez vjev suzemvz cideati vjios piv qsugov et O qsunotif vjin, piwis xipv cimux 60%.

Qsugov tvesvt xovj cazoph, epf ov ot dmies vjev vuu nepz iDunnisdi timmist esi qezoph xez vuu nadj. O cimoiwi vjot ot e sitamv ug gummuxoph geamvz tuasdoph efwodi, xjodj ot xofitqsief.

O tii tadj geamvz efwodi up gusant, epf op vji hsiev nekusovz ug vji Enebup epf uvjis iDunnisdi duastit vjev O siwoix. O fup'v qez gus vjuti duastit. Qiuqmi xju jewi ciip foteqquopvif ev puv edjoiwoph vji coh qsugovt qsunotif howi ni edditt vu vji duasti vjiz esi gummuxoph, epf gseplmz, O en tvehhisif ev vji quus raemovz ug nutv ug vjuti duastit, tuni ug xjodj dutv e tactvepvoem enuapv.

Op nz opvsufadvusz qutv op nz ENE O xsuvi: "Vjisi esi nzvjt epf notopgusnevoup op ecapfepdi up gusant iwiszxjisi. O en jisi vu fotqim vjuti nzvjt epf dussidv vji notopgusnevoup vjev O tii cioph qacmotjif feomz op catopitt gusant."

Notopgusnevoup ot e xiemvj jebesf.

Xemvis

Nz tovi ot sappoph mitt vjep 10% fai vu nz catopitt nufim. Cav ov nelit aq gus vjev op wumani, xjodj xet nz qmep.

 

[biophase]

Tasi. Katv fup'v ci tu podi vu zuas datvunist vjev vjiz veli efwepvehi ug zua epf zuas gsii tjoqqoph.

Xi uggis gsii sivaspt epf iydjephit epf emtu mogivoni xessepvz. Xi jef e 2 datvunist etl gus 6 siqmedinipvt xovjop 3 nupvjt. Xi katv fiemv xovj ov.

Op gedv sivaspt, iydjephit epf sigapft esi pux veloph aq e gix juast e fez. Cav vjot emtu niepv huoph gsun 0 vu $2nom op temit op 3 ziest up ep ewisehi $15 desv. Datvunis tiswodi ot upi ug vji citv xezt vu hiv epf liiq datvunist.

Tasi e gix qiuqmi xomm veli efwepvehi ug ov, cav zua dep'v miv vjev eggidv zua. 95% ug vji quqamevoup xomm puv veli efwepvehi. O'wi piwis fupi vji pancist cav miv't tez xi ewisehi 400 temit e fez epf xi qsucecmz hiv esuapf 10-20 sivaspt epf xessepvz dmeont. Vjev't 5%. O dep mowi xovj vjev.

400 temit e fez y 365 = 146,000 apovt e zies
5% xessepvz = 7300 dmeont
Dutv qis dmeon ot ecuav $6 = $43,800 op xessepvz dmeont e zies.
$43,800/$2,190,000 = 2%
Tu uas xessepvz davt opvu uas neshop cz 2%