Buyer Cost to Serve & Development Recovery

How to read this sheet

Development is charged to the buyer that caused it rather than spread across the office, which is the whole difference between this sheet and the management accounts. Samples that went nowhere belong in the count: they are the cost of a low hit rate and excluding them makes a heavy sampler look ordinary. Order handling is charged per order rather than per piece because documentation, follow-up and inspection booking do not scale with quantity - if some part of your office cost genuinely does scale, leave it in the gross margin from the costing sheet and out of this figure, or it will be counted twice. The minimum order value is the buyer's own burden divided by its own gross margin, so it differs per buyer and is the number to put in front of a merchandiser being asked to accept a small repeat; below it that order consumes more than it pays whatever the price looks like. A buyer with no orders won is carrying development against nothing and cannot be given a net margin at all - it is excluded from the rankings rather than shown as the worst, because the sheet cannot tell a failed relationship from one that has not converted yet. Nothing here counts the value of a sample that loses this season and wins the next, or of a buyer whose volume keeps a line loaded that would otherwise stand idle; both are real and both argue for keeping a buyer this sheet ranks last.