Illa,
Thank you for the name Fred Hickey. This is directly from the last 10Q which I saved in its entirely on my hard drive.
"Marketing and Sales
Quarter Ended March 31,
1998 1997 % Change
(in thousands)
Marketing and sales $19,503 $3,906 399%
Percentage of net sales 22.3% 24.4%
Marketing and sales expenses consist primarily of advertising, public relations and promotional expenditures, as well as payroll and related expenses for personnel engaged in marketing, selling and fulfillment activities. All fulfillment costs not included in cost of sales, including the cost of operating and staffing distribution centers and customer service, are included in marketing and sales. Marketing and sales expenses increased primarily due to increases in the Company's advertising and promotional expenditures (including expenses associated with Internet aggregator promotional relationships), increased payroll and related costs associated with fulfilling customer demand and increased credit card merchant fees resulting from higher sales. Such expenses decreased as a percentage of net sales due to the significant increase in net sales. The Company intends to continue to pursue its aggressive branding and marketing campaign and expects its costs of fulfillment to increase based on anticipated sales growth. Therefore, the Company expects marketing and sales expenses to increase significantly in absolute dollars. "
The labor to place books in boxes, place mailing lables on the boxes including shipping, and the bank discount fees are placed in marketing. The company has NO payroll according to the 10Q except for administrative which was very small. This is as clear as it gets.
Glenn
PS The company states without these marketing expenses they would be profitable. How does one sell books without fulfillment and credit card fees? |
