projecteverest

Cost Structure

[Cost Structure]: Fuel Fiji July 2018

The current and immediate future cost structures of the Buka Stoves are as follows (all in FJD):

EXPENSES

 

Current

Immediate Future

Buka 4.0

Buka 5.0

Materials 

$8.40

$3.30

$23.30

Labour 

$20-$25

$40.00

$35

Transportation 

$0

$0

$0

TOTAL EXPENSES 

$33.40

$43.30

$58.30

 

REVENUE

TOTAL REVENUE 

$60.00

$60.00

?

 

GROSS PROFIT 

$26.60

$16.7

?

GROSS MARGIN 

44.3%

27.8%

?

 

KEY QUESTIONS

  • What overheads are involved with running a Rocket Stove business in Fiji?
  • How many hours would we need employees to work each week to make this an autonomous business?
  • What is a fair wage for employees?
  • How much do we need to pay in transport once we establish more stores than just RB Patel?
  • What marketing is necessary to make the stoves sell successful in stores?
  • What marketing can we afford and how much does it cost?
  • What does safety certification cost in Australia and at what scale is it beneficial to ascertain this?
  • What does ‘made in Fiji’ certification cost in Fiji and at what scale is it beneficial to ascertain this?
  • At what scale does having our own manufacturing line and warehouse become beneficial?

What have we missed? Obviously, the Buka Stove Project is very much still in a project stage and therefore dependent on PEV and student support. For this reason, the costing structure of the stoves needs a significant amount of work over the Summer to ensure the business is fully aware of all its costs and operating with sustainable margins. Our margins have also shrunk significantly as the quality of the product has improved, and this is something that needs to be fixed over the Summer. Would love to hear your thoughts, concerns and suggestions regarding the Buka Stove costing structure!

edited on 6th September 2018, 00:09 by Justin Hakeem

Cris Birzer 10 months ago

I think it would be cheaper to buy a Berkeley Dafur Stove (BDS) for $20 and ship it to Fiji. I assume you could get a licencing agreement from UC Berkeley / Pollinate Energy.

Reply 1

Stuart Heap 10 months ago

Hi Cris. From memory the BDS you're mentioning is 20 USD while the above values are in FJD, making the BDS over 40 FJD with further expenses on top of that. I believe materials for the 5.0 was $23.30 from what I calculated as well and not $33.30, but Lincoln Refrigeration also gave a standardized rough cost of 65 FJD to make the whole thing with labour and materials included.

Reply 0

Lucy Preiss 10 months ago

Thanks for the comment Stuart! And thanks also for pointing out my typo, I'll fix it in the post.

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Cris Birzer 10 months ago

HOWEVER, for any University of Adelaide students (or others, but there could be insurance issues), I'm happy to supervise summer research, or Honours or postgrad projects on rocket stoves. Just let me know.

Reply 1

Andrew Vild 10 months ago

Status label added: Cost Structure

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