Subject: RE: "I've got more programmers than you"
From: "Larry Augustin" <lma@valinux.com>
Date: Sun, 7 Oct 2001 08:25:47 -0700

No.  In that case COGS would include the costs necessary to operate the
download site.

Larry M. Augustin, CEO, VA Linux
Tel: +1.510.687.7029      Fax: +1.510.683.8680
Web: http://www.valinux.com

 

> -----Original Message-----
> From: Bernard Lang [mailto:Bernard.Lang@inria.fr]
> Sent: Sunday, October 07, 2001 6:39 AM
> To: lma@valinux.com; 'Christian Robottom Reis'; 'Bernard Lang'
> Cc: fsb@crynwr.com
> Subject: Re: "I've got more programmers than you"
> 
> 
> Is it correct to consider that the idea of free software economy is
> that COGS may be considered 0 if people just download their copy from
> the internet, while a free-software company may actually have to have
> another business offer because there are others costs to be covered
> (e.g. R&D).
> 
> 
> bernard
> 
> On Sat, Oct 06, 2001 at 06:38:41AM -0700, Larry Augustin wrote:
> > > From: Christian Robottom Reis [mailto:kiko@async.com.br]
> > >
> > > > Gross Margin:
> > >
> > > Margin after you've paid off direct suppliers. In a grocery store,
for
> > > instance, the what's left of the revenue after you've paid the
farmers
> > > that sell you your vegetables. I'm not sure why EDS has so low
gross
> > > margin here, though, so maybe I'm wrong.
> >
> > This is one people often don't understand.  It's not just direct
> > suppliers (which is called "direct material cost" and the associated
> > "direct material margin").  It's the total cost of providing the
good or
> > service.  (COGS == Cost of Goods Sold.)  It's not the cost of
selling,
> > marketing, or developing the good or service.  Think of it this way.
> > You could spend the costs to develop, engineer, market, and sell the
> > product without anyone ever buying.  Once they buy, you have certain
> > costs necessary to deliver the good or service.  Those include the
cost
> > of manufacturing the good (including labor), and the cost of
supporting
> > the good or service.
> >
> 
> --
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