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The World's Dumbest (and Fattest) Entrepreneur tried to spike the ball and show that he's a successful businessman and is immediately called out. His own screenshot contradicts his statement and displays only gross sales. Jeremy gives no actual profit statement and "forgets" to account for any business costs.
Let's do some math:
In August, at $39,600 spread over 2,312 units, ol'Ham Planet is only making $17.13 per unit. Being that all his coffee starts at $20.00, he's taking a big hit right off the bat. As the poster rebuts, he fails to take into a large number of costs. Let's start with salary. Jeremy repeatedly talks about having several employees. Let's go with the stated amount of 40k per person salary.
Gross earnings without Jeremy paying any benefits, unemployment insurance and other legally required amounts (state tax, sales tax, etc) equals $1,817.12. Lets assume he's utter shit with his employee's and doing as little as possible in the way of benefits and round the bi-weekly pay to $2,000. This would put monthly pay at $4,000. At five employees it'll be
$20,000.
Next let's look at shipping. At an INCREDIBLY generous amount of $4.00 per order to ship the coffee, that's a significant cost. In September there were 1.18 (rounded up) units per order. Being very generous again, we'll give Quarter Pounder a successful month at 1.4 units per order. This would give us 1,989 orders in August. At $4.00 per order with cut rate postage, we get
$7,956.
Now let's talk about the beans. Taking data from a wholesale coffee roasting site we can get some decent pricing.
You can read the website info here.
Looking over all of the coffee selections it's reasonable to conclude the offerings are varied between commodity and specialty grade beans. Being generous, we'll call the beans $3.50lb all in between the high and low value beans. Based on roasting data you need between 1.2 - 1.3 lbs. We'll take the middle ground of 1.25lbs per pound of roasted coffee. To get a rough estimate of the amount of beans needed, first we'll take a look at product size.
The smallest product size is 12 oz per bag. Assuming the 80/20 rule (80% of sales should be 20% of your products) its reasonable to conclude that 80% - 90% of his products sold are coffee. We will go with 85%. So 2,312 x .85 = 1,965 bags. 1,965 x 12 oz = 23,582 oz of roasted, ground and ready to brew coffee. We will round up to 24,000 oz as obviously Jeremy wouldn't be roasting per bag. 1.25 of beans is 20oz. 24,000 / 20 = 1,200lbs of beans needed. 1,200lbs x $3.50 =
$4,200
Moving onto bags, we can see he's using premium packaging. Even at a lowball price he's paying $.50 a bag. 2000 bags =
$1000. This doesn't include the cost of shipping these goods to Big Boy's warehouse but it shouldn't be too high so I'll cut fatty a break on this one and write it off. We will, however, add another
$1250 for shipping materials. This is on the cheap end.
For reference here is pricing from ULINE, the standard for all things shipping and warehouse materials in the USA (Shoutout ULINE and their freebie catalogue).
Let's get a quick rundown so far:
Labor - $20,000
Shipping - $7,956
Beans - $4,200
Packaging - $1,000
Shipping Materials - $1,250
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So far - $34,406 (LMAO)
Next, let's do warehouse space. Jeremy is going to need a flex space capable of having an office, a roasting floor, storage, packaging, etc. This will require area's meeting food handling specifications which means a certain level of cleanliness and material design, ventilation, etc. Reasonably he'll need somewhere between 3,000 and 5,000 sq ft.
Wisconsin Rental Space Website
Being EXTREMELY generous again on average pricing per sq ft based upon his business needs, we will put it at $10 sq ft. To be very clear, I'm lowballing the fuck out of this. We'll take the average for the space needs of 4k sq ft. This puts us at $40,000 per year. $40,000 / 12 =
$3,350 per month. Due to the need for temperature control, moisture control, powering roasters, lighting, internet, basic utilities, we'll put this again at a generously low
$1,000 per month.
Add it all up and we are at:
$38,756 per month cost
$39,600
- $38,756
-------------
$844
I can go on.
Remember everyone, Jeremy mentioned moving all his fulfillment to Amazon. For those who don't know, Amazon takes 50% up front for fulfillment. None of that accounts for the roasting, packaging, etc. Let's do that math:
Labor - $20,000
Beans - $4,200
Packaging - $1,000
Shipping Materials - $1,250
Amazon Fulfillment - $19,800
-----------------------------------------------------
$46,250
$39,600
-$46,250
--------------------
($6,650)
I'll even give Chubbs a break and say he got special introductory pricing of only 35%. Here's that math:
Labor - $20,000
Beans - $4,200
Packaging - $1,000
Shipping Materials - $1,250
Amazon Fulfillment - $13,860
-----------------------------------------------------
$40,310
$39,600
-$40,310
--------------------
($710)
Jeremy, buddy. You're total shit at business. You're operating at a loss most, if not all months if you're actually running the business independently and doing all this in house or doing everything in house outside of Amazon fulfillment. The only way you'd be turning a profit here is if you were one of numerous other private labels in a much larger roasting operations where they could eek out a small margin like the previous website mentioned.
Oh wait...
They even had a graph that would fit that model entirely...
It's almost as if that's EXACTLY what you're doing Jer.
Stop drinking and tweeting like a bitch with a skinned knee.
Ring the bell Ashton.