Case Brief

The founders of a jewellery company, Foxy Originals, needed to decide how best to increase sales. The company sold its jewellery both online and through retailers across the United States and Canada. The founding partners had to decide whether they should focus more of their time and money on developing online sales or continue attending trade shows that attracted additional retail locations for Foxy Originals' products. Both partners wanted to ensure that they achieved a healthy work-life balance.

5. Calculate the variable costs per order incurred at a trade show and the variable cost per order in online order.

6. For each distribution strategy, calculate the unit contribution and the contribution margin rate for each of the two product lines (necklaces and pairs of earrings). What is the weighted average contribution margin rate for an order at the trade show and online order?

7. Calculate Foxys Break-even point for each distribution strategy.

8. Which distribution channel is projected to be more profitable in 2015?

9. As per Ger and Chemel, perform relevant analysis and give a final decision. Support your decision with relevant justifications.