Sprinter 70cpm + fsc

Turtle

Administrator
Staff member
Retired Expediter
Your carrier only makes 30% minus the cost to support on going bonus programs.... You guys should be buying Johns lunch every day....lol
Well, 30% times a snotload of trucks. If the fleet were suddenly halved most those bonuses would have to go away. If you have enough trucks, then a penny profit can make you rich. Also, you're incorrectly assuming that the company trucks only make 30%. And you're completely forgetting the bazillions raked in from the QC cash cow. :D

And your point is? don't be so silly you know exactly what I mean.
I don't think he does. I certainly don't. Your profit percentage isn't the amount above your expenses - that's called markup. The gross profit margin expresses your profits as a percentage of the total sales revenues generated, not as a percentage of expenses. Gross profit is simply where you take the cost of goods (in our case, the operating expenses only (fuel, oil, tolls)) and divide it by the gross revenue.

Since the CPM includes many things other than operating expenses, we look more at net profit margin than gross profit margin. For the net profit margin you take all expenses, including operating expenses, truck washes, maintenance, insurance, everything that goes into that CPM, and divide it by the gross revenue (all income including bonuses, layover, detention, etc.). It's quite impossible for that number to be greater than 100% unless you are just making a killing in non-line haul income like detention and other accessorials.

In your example above, of a 35 cent CPM and a line haul to the truck of 85 cents, that's a 41.1% net profit margin, not 120%.
 

OntarioVanMan

Retired Expediter
Owner/Operator
Well, 30% times a snotload of trucks. If the fleet were suddenly halved most those bonuses would have to go away. If you have enough trucks, then a penny profit can make you rich. Also, you're incorrectly assuming that the company trucks only make 30%. And you're completely forgetting the bazillions raked in from the QC cash cow. :D

I don't think he does. I certainly don't. Your profit percentage isn't the amount above your expenses - that's called markup. The gross profit margin expresses your profits as a percentage of the total sales revenues generated, not as a percentage of expenses. Gross profit is simply where you take the cost of goods (in our case, the operating expenses only (fuel, oil, tolls)) and divide it by the gross revenue.

Since the CPM includes many things other than operating expenses, we look more at net profit margin than gross profit margin. For the net profit margin you take all expenses, including operating expenses, truck washes, maintenance, insurance, everything that goes into that CPM, and divide it by the gross revenue (all income including bonuses, layover, detention, etc.). It's quite impossible for that number to be greater than 100% unless you are just making a killing in non-line haul income like detention and other accessorials.

In your example above, of a 35 cent CPM and a line haul to the truck of 85 cents, that's a 41.1% net profit margin, not 120%.
Thank you for that explanation ...:)
PS I wasn't including company trucks. As I wouldn't have them kind of numbers..
 
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Mdbtyhtr

Expert Expediter
A 100% mark up is only a 50% Gross profit. Cost of goods sold is actual expenses to include labor, and your desired profit is added to that to determine your minimal acceptable price point.
 
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