Amp'd Files For Bankruptcy Protection
growing too fast...?
🤣
In this situation fixed is wages, equipment costs, rent, etc. The variable cost though is related on everything that needs to be increased as customers grow.
The problem here is that in some cases it could cost a lot more to aquire that extra 10,000 customers than it did to not aquire them. Even in making money on those customers, it might not be as much or barely any at all.
Example:
1st 10 Customers cost $100 to maintain and the company profits $500.
2nd 10 Customers cost $200 to maintain and the company profits $500.
1st 10 --> Avg Cost = $10, Avg Rev = $50 | Avg Profit = $40/cust.
Al...
(continues)
temp_name said:...
Growing too fast is not "bad", but it might not be the best in terms of profit. In economics they teach you of two costs: fixed and variable.
In this situation fixed is wages, equipment costs, rent, etc. The variable cost though is related on everything that needs to be increased as customers grow.
The problem here is that in some cases it could cost a lot more to aquire that extra 10,000 customers than it did to not aquire them. Even in making money on those customers, it might not be as much or barely any at all.
Example:
1st 10 Customers cost $100 to maintain and the company profits $500.
2nd 10 Customers cost $200 to maintain and the company profits $500.
1st 10 --> Avg Cost = $10, Avg Re
(continues)
middlekid3058 said:
It is the MVNO model, some have the funding to survive and some simply do not have it. I can honestly say this is not the last of the MVNO deaths(remember ESPN mobile)...
ESPN Mobile? Who'd wanna remember them?
How do you operate a successful business competing with the people that you are paying them to use their towers for your whole business structure?
How about this let's open up a company that purchases cars from Honda, re-brand them, and sell it to the public, while competing with Honda... That would have the same success rate as Amp'd Mobile purchasing from Verizon, selling to the public, while competing with Verizon. It's a no brainer
This forum is closed.