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Gold/Mining/Energy : Napier International Technologies Inc. (T.NIR)
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To: DAVID IN B.C. who wrote (1697)9/22/1998 12:16:00 AM
From: DAVID IN B.C.  Read Replies (2) of 2444
 
65% Margin is Pie in the Sky.
Since you are all back to pushing NIR into the stratosphere lets go through a little discovery on this so called profit margin on the life and times of a barrel of SV35.

The following is based on the widely held opinions of most here that a 45 gal drum will sell for $1000.

In this scenario we work back from the customer to Napier:

1. TWA - buys at $1000.00

2. Distributors Margin - ($200.00)
This covers all costs related to stocking and warehousing,delivery and local sales service.
If Nir is supplying direct then this will
be an overhead they must incur?

3. Logistic Transport to the Main Distribution Centres - ($50.00)
Based on a truckload quantity (40 Drums) at $2000.00 per load.

4. Contract Manufacturing - Chemical Materials ($200.00)
- Packaging ($25.00)
- Producers Fee ($300.00)

- Total ($525.00)

5. Napiers Operating Margin: $1000 - $775 = $225.00

The cost of the chemical materials could be plus or minus 10%, but based on the high water content of SV35 this reflects a very low material cost. I am not trying to stack the numbers just pointing out that your assumptions of a 65% margin are seriously flawed. For those who live in the real world do your DD on the costs related to the chemical industry.

S
WAGAMAMA

N
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