Financial Structure 

Cost Price: 

The manufacturer will sell 150 candles to us @₹10 per candle which will amount to ₹1500.
This amount includes all the expenses incurred by the manufacturer and is the final amount
due to the candles. We will sign a bill payable issued by the manufacturing unit and pay the
entire amount within a time frame of 2 months. Apart from acquiring candles we will also
buy 150 plastic tubes and 150 metal frames from different sources @₹10 and @₹25 each
respectively. We will make the payment within time frame of 2 months after signing bills
payable contract with the seller. 
 

Our company will assemble the final product from the materials bought from other parties. 
 

Final price of 1 product = Cost of candle paid to manufacturer + Cost of glass tube + Cost of
metal stand + Amazon’s cost of selling the product* 

                                      = ₹10 + ₹10 + ₹25 + ₹100.5 

                                      = ₹140.5 

*Amazon’s cost of selling the product = Referral fee (10.50% of item price of our product in
the category of home- fragrance and candles) + Closing fee (based on price) + Easy Ship
Weight Handling Fee 

         = ₹26.5 + ₹5 + ₹69(for nationwide delivery)  

                                              = ₹100.5(Calculated using amazon seller portal) 

Our company will also sell its product in various retail stores as well. 

Selling Price: 

SP of the product = Cost Price + Profit Margin 

                             = ₹140.5 + ₹109.5 

                             = ₹250 

Break-Even Point: 

The break-even point refers to the amount of revenue necessary to cover the total fixed and
variable expenses incurred by a company within a specified time period. This revenue could
be stated in monetary terms, as the number of units sold or as hours of services provided. 
The break-even point also can be considered as the point in time when revenue forecasts are
exactly equal to the estimated total costs. The break-even point will be calculated by
estimating the no. of units we need to sell to make payment to our creditors. 

Payment made to creditors after every 2 months= ₹6750 

So, we need to sell at least 27 units (6750/250) in order to make the payment. 
The money earned by the company will be partly reinvested in it for expansion and growth
purposes.