retsof18

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John 11 years, 5 months ago on EBITDA target vital to $40m BTC spend

EBITDA target vital to $40m BTC spend

Marlon Johnson has to be one of the biggest hypocrites in the Bahamas. On the one hand he is here telling us that BTC wants to make 30% gross profit (earnings before EBITDA) on its investment while, on the other hand, he is telling persons who sell BTC top up and phone cards that they must settle for 3-6 percent gross profit on their sales. So, in essence, Johnson is saying while BTC expects to have $1.50 or 30% of $5.00 left after it sells a $5.00 card and pays its expenses, the retailer is only given 25 cents to sell a $5.00 and pay ALL his expenses. Do you know that less than 50% of the persons who now sell phone cards and /or Top Up for BTC discontinue the service within 6 months to a year? And do you also know that most of the smaller vendors who sell these products do not make a profit? In fact it costs many of them more to sell the phone cards and top up so they actually sell at a loss. And that does not even include compensation for their own time that is invested in selling they products. Some may argue why persons continue to sell top up or phone cards if they make no money. And why does BTC continue to give its vendors such a slim margin. The answer is quite simple. BTC is the sole provider of cell service in the Bahamas, and the demand for is product will remain constant, regardless of how many vendors there are in the market. So the market is driven by demand. Vendors are somewhat duped into the idea that because the top up and phone cards are selling and in such high volumes, there is some profit to be made. But starting off with a 3-5% margin (some 5-7 times smaller than what BTC expects to see after paying its operating expenses) thy never reach the point where their own revenue exceeds their expenses and they could realize a profit. So in essence they are providing their services to BTC for free or even at a cost to their own selves. Yet BTC is smiling all the way to the bank , ear to ear, and proudly sponsoring every major event in this country, regattas, junkanoo and Carifta included