What Is Contribution Profit

45

If you’ve never heard of what is contribution profit then you should know about it. There are actually two types of profit in hatcheries. One is straight profit and the other is called return on investment or ROI. If you want to know what is the contribution profit then read on.

First of all you need to understand what is contribution profit. Take the net profit margin and multiply that by the number of units produced. That is your contribution to profit. Sure, your other variable costs may also vary and so may your profit margin. Especially, with large scale hatcheries.

For instance, say you’ve built an economical chicken coop. That coop is perfect for breeding and raising chickens. The chickens produce eggs and the eggs are perfect for what is chicken feed. Your profit will be the difference between what is called the dry chicken feed and what is called wet chicken feed.

This example is just one of many poultry farm ideas that can be used. The concept is simple enough but the details must be taken care of. Like most things in life, it is best to have a well thought out and planned structure before you start building. You can use chicken coop blueprints to help you out but the final product will still depend on you. The key here is finding profit potential in your area.

After you have made sure your hatchery is built properly and the coop is setup. The next step is to look at the types of animals you could raise on your poultry farm. If your area does not offer much profit potential, you should not consider raising the animals. That said, if there is enough profit potential you should definitely consider deep cleaning your existing farm to clean off all the leftover profit potential.

One example would be selling the chicken feed. You can make a killing selling this to the local feed stores. If your chicken coop is ready and the poultry laying hens are producing quality eggs then they will keep producing until you are ready to move on. It takes time to get a healthy flock of chickens but that is also true of any farm. Just like a house, it takes time to become a successful chicken feed farm.

The point is that you need a way to turn a profit. After you have determined what is a good place to build a poultry farm and the types of animals you will raise you need to find a way to get all your profits. This is where getting involved with the local chicken feed stores can help you. These stores sell you chicken feed and in return you get a percentage of the sale. If you were to sell the entire load of chickens at this one store you would not make a cent of profit.

You should however consider building another coop to collect the profits. Why? Well the simple answer is that once you have built your first coop you will realize that you can make a lot of money by building more. Your first coop may be fine. But as your business grows you will have to think about whether or not building another coop will increase your profit potential.

One of the best ways to see what is contribution profit with your chicken feed business is to go on eBay and search for chickens. When you view the listings you will see that each listing is accompanied by a picture of the chicken feeders you are selling. The picture alone should give you a pretty good indication of what is contribution profit to expect. For instance if you are selling red meat feed you should be expecting to make around 50% profit per each animal you sell.

Another thing to look for when you want to see what is contribution profit is the wording on the auction website. Many sites are pretty clear about what is contribution profit. Others will give you a little more detail. You want to go with those sites that indicate what is profit accordingly on their site. Some sites have been known to leave the sales in green so be careful.

The key to understanding what is the contribution to profit is to know what you are looking for. Chickens are simple animals and they will eat what they are raised for. If your chicken feed is for sale at a price that you think is fair you are not going to make as much profit as you could if you were selling high quality commercial grade chicken feed. Also what is contribution profit is related to what the people are paying per animal. If you are trying to sell premium quality chickens feed you will not be able to make the same amount of profit, but you will likely be able to make more than what is required on eBay for your listing.