Selling Assets

Definition (short). You earn money by selling a product once and transferring ownership. After that upfront payment, obligations are limited (warranty, support). Classic manufacturing/retail: revenue = units × price.

Recent examples. Apple Inc. exemplifies asset sales: 51% of Apple’s ~$391 billion FY 2024 revenue came from iPhone hardware, a one-time purchase product line. Automakers like Toyota and consumer electronics giants such as Samsung also rely on outright product sales as their core revenue engines.

Historical example. The Ford Model T sold over 15 million units between 1908 and 1927, proving that scale manufacturing plus a single upfront price could transform affordability—and a company’s economics.

KPI Definitions (matches the nodes above)

1. Profitable Growth (composite)

   EN: Balanced growth in revenue with healthy profitability.

   Pseudo: w1 * Revenue_Growth% + w2 * Net_Profit_Margin% or Grow revenue while NPM ≥ threshold.

   Why: Forces trade-off clarity—no growth-at-all-costs or margin-at-all-costs blind spots.

   Benchmark: Exec teams often set explicit weights or guardrails (e.g., “≥10% growth AND NPM ≥20%”).

2. Revenue Growth % EN: YoY % change in product revenue. Pseudo: (Rev_t − Rev_{t−1}) / Rev_{t−1} * 100 Why: First read on demand, pricing power, and market share shifts. Sustained high growth buys strategic optionality. Benchmark: Mature manufacturers often grow ~5–8% YoY, while top-decile durables can exceed 20% in expansion phases.

3. Gross Margin % EN: Share of revenue retained after COGS. Pseudo: (Revenue − COGS) / Revenue * 100 Why: Core unit economics; funds SG&A, R&D, profit. Benchmark: Consumer electronics median ≈ 30%; Apple’s overall gross margin hit ~46.9% in Q1 FY25.

4. Units Sold EN: Total items delivered in period. Pseudo: Σ units_sold Why: Volume driver; reveals penetration and lifecycle stage. Benchmark: Flagship auto models sell ~1 M units/year; niche B2B devices sell in the thousands.

5. Average Selling Price (ASP) EN: Realized average price per unit after discounts. Pseudo: Revenue / Units_Sold Why: Signals pricing power and mix (premium vs entry). Rising ASP can offset flat volume. Benchmark: iPhone ASP ≈ $800, while global smartphone ASP sits near $285–300.

6. Net Profit Margin % EN: Net income as % of revenue. Pseudo: Net_Income / Revenue * 100 Why: Bottom-line health; compresses strategy + execution into one number. Benchmark: Premium hardware firms ~15–25%; big-box retail often 2–4%. Apple FY 24 ~24–25%.

7. Operating Expense Ratio % EN: SG&A + R&D as % of revenue. Pseudo: Opex / Revenue * 100 Why: Cost leverage; shows whether scale translates to profit. Benchmark: Lean manufacturers 10–15%; many tech-heavy hardware players hover ~20%.

8. Inventory Turnover (x) EN: Times inventory turns per year. Pseudo: COGS / Avg_Inventory Why: Working-capital efficiency; slow turns trap cash and risk obsolescence. Benchmark: Durable goods 5–8x; fast fashion >10x.

9. Number of Customers EN: Distinct purchasing customers in period. Pseudo: COUNT(DISTINCT customer_id) Why: Market breadth and concentration risk indicator. Benchmark: B2C brands = millions; capital equipment vendors = dozens/hundreds.

10. Units per Customer EN: Average quantity each customer buys. Pseudo: Units_Sold / Customers Why: Captures repeat purchase and bundle depth. Benchmark: Big-ticket durables ≈1; consumables/accessories 3–5+.

11. List Price EN: MSRP before discounts. Pseudo: MSRP_value Why: Psychological anchor; defines promo headroom. Benchmark: Premium brands often list 20–50% above category medians.

12. Discount Rate % EN: Average markdown from list to realized price. Pseudo: (List − Realized) / List * 100 Why: Tracks promo dependency and margin leakage. Benchmark: Consumer electronics promos 10–15%; luxury <5% except controlled clearance.

13. COGS per Unit EN: Direct cost per unit. Pseudo: COGS / Units_Sold Why: Every dollar saved drops to gross margin; core lean initiative. Benchmark: Targets of 2–5% YoY reduction are common in best-in-class ops.

14. Days of Inventory (DOI) EN: Average days inventory sits before sale. Pseudo: 365 / Inventory_Turnover Why: Cash velocity and obsolescence risk measure. Benchmark: Best-in-class electronics <45 days; typical manufacturers 60–90 days.