You’ve probably heard the phrase “if you don’t measure it, you can’t control it”. That’s why KPIs for remanufactured computer companies, are so important. They are essential to measure a company’s effectiveness in meeting objectives.
Definition of key performance indicators
First of all, it must be said that a KPI (Key Performance Indicator) is, first and foremost, a quantitative metric that makes it possible to measure the level of performance of a process. In other words, it is the most objective answer to questions about the progress of a company’s objectives.
KPIs exist to measure overall company performance as well as to measure specific areas, processes or programs.
In the case of technology businesses such as yours, where you commercialize refurbished computers, these indicators are essential because they allow you to measure and evaluate the progress of your specific sales objectives according to each type of product, whether to measure the output of laptops, CPUs, monitors and Desktops or to determine which brands of computers (Dell, Lenovo, Hp or Apple) have higher sales performance.
In addition, the correct definition and monitoring of KPI’s drives you to achieve the strategic objectives of your business, gives you information about the resources used and gives you a clear idea of which actions are working and which are preventing the achievement of business objectives.
However, there are some key performance indicators that you should not overlook if you are a distributor of remanufactured computers. Therefore, CompuOffers would like to share with you 5 KPI’s that will be useful to make better decisions in your used technology distribution business:
1. Cash flow projection for remanufactured computer companies:
The indicator for projected cash flow allows you to plan the efficient use of cash to know if your sales and margins are adequate. To do this, we must know the total cash used and generated in operating, investing and financing activities, but also require projections of future cash outflows and revenues for a given period of time.
In this specific KPI we will take a time frame of 4 weeks. In this way, it is necessary to
only add the total cash the company has in savings to the projected cash value for the next four weeks; then subtract the projected drawdown for the next four weeks:
SAVINGS + projected cash at 4 weeks – PROJECTED CASH WITHDRAWAL (4 wks)
2. Gross profit margin as a percentage of sales for remanufactured computer companies
This indicator is essential for your distribution business as it allows you to obtain a percentage of revenue earned from the sales of remanufactured computers in relation to the necessary costs of remanufactured computers. In other words, it helps you quantify how much money is available after paying suppliers:
(Gross Profit / Sales x 100) / Sales
This metric is relevant because it serves to optimize operations and adjust prices of products and services, and also allows you to compare processes of similar organizations in the technology industry.
3. Inventory turnover for remanufactured computer companies
In logistics and warehouse management, this indicator is necessary to define the most appropriate strategies to improve the efficiency of these processes. In this way, it determines the number of times the warehouse has to be replenished with the necessary products to achieve efficient logistics management.
To make the measurement, the total number of computers sold at cost price must be considered and then divided by the average value of units in stock. Thus:
Inventory turnover = Sales for the period (cost price) / Average stock for the period
4. Revenue growth rate for remanufactured computer companies
The progress of a business can be evidenced by measuring the revenue growth rate. This allows you to measure progress on a month-to-month basis rather than obtaining an absolute figure such as current revenue.
Although it may seem counterintuitive, ideally for a new business, its growth rate should decrease over time, as this indicates that the company has matured and is finding its break-even point. However, in the beginning, it may exhibit exponential growth.
The revenue growth rate of your computer distribution business can be measured with the following formula:
% revenue growth rate = [($) Revenue Month B – ($) Revenue Month A] / ($) Revenue Month A X 100.
5. IRR for remanufactured computer companies
he Internal Rate of Return is the indicator that determines the profitability of an investment. Thus, the higher the IRR, the higher the profitability. Therefore, calculating this rate of a project makes it easier to make decisions about the investment you intend to make in your used computer distribution business.
The formula that allows you to calculate the IRR is as follows:
When you start putting indicators like this into practice, you will be able to make better decisions and focus the distribution to specific objectives to continue scaling in the business of remanufactured computers hand in hand with CompuOffers as a strategic ally for the import of computers from the United States.
Remember that with us you can make important alliances to consolidate your position in the used technology market and obtain higher profit margins and open the way for new investments and projects to position yourself in the sector.
Acquire lots and containers of remanufactured computers with us.
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