[A Marshmallow Classic from 9/9/2011]
Well Dizzy you made an oops on the Tahki Jackson deal the other day. But did you really think you could make it up on volume?
I think you need a lesson from Business Plan 101.
And where better to find such a lesson than the 1953 “I Love Lucy” sitcom “The Million-Dollar Idea” show.
In an effort to make some extra money, Lucy and friend Ethel decide to produce Aunt Martha’s Old Fashioned Salad Dressing based on Aunt Martha’s very tasty recipe.
They set the price at $.40 per quart – ah the good old days - and do a 1950’s version of an infomercial.
Orders start coming in!
With production ramping up in the kitchen, Lucy’s skeptical husband sits down to calculate the cost of goods for the initial run of 23 orders:
7.21 for groceries (remember this is the 1950’s)
.69 kick back for the TV spot
9.20 for 23 quarts
Cost of goods per quart: $.40 – oops no profit!
Lucy’s response to this revelation: “Maybe there is no profit on each individual jar, but we’ll make it up on volume.”
So, Dizzy do you now understand about profit margin?
Dizzy, where are you?
What do you mean he left to get a clover salad with some of Aunt Martha’s Old Fashioned Salad Dressing?