Yusra3
VIP Contributor
Cost per wear is a very important metric for understanding how much it costs to purchase a particular product, and it's an important part of the equation when you're trying to determine whether or not your company should be purchasing new inventory.
It helps you know how much a product costs to maintain over time, and gives you an idea of how much time it will take for the product to pay itself off.
You can calculate your own CpW by dividing the cost of ownership by the number of times you wear your product over a period of time.
The average cost per wear is calculated by dividing the total cost of all goods sold by the number of times that goods were worn during a specific period of time. So if you sell 100 pairs of jeans and they are worn twice, then your cost per wear would be $2 each time they're worn.
This metric can help you determine if you're spending too much money on goods that aren't selling well or too little money on goods that are doing well. It also helps you figure out where there might be opportunities for cost optimization for example, if you know that your company is spending $3 on every pair of pants it sells but only getting $2 back from customers per wear, then there may be ways that you can reduce costs without sacrificing quality (such as using cheaper material).
It helps you know how much a product costs to maintain over time, and gives you an idea of how much time it will take for the product to pay itself off.
You can calculate your own CpW by dividing the cost of ownership by the number of times you wear your product over a period of time.
The average cost per wear is calculated by dividing the total cost of all goods sold by the number of times that goods were worn during a specific period of time. So if you sell 100 pairs of jeans and they are worn twice, then your cost per wear would be $2 each time they're worn.
This metric can help you determine if you're spending too much money on goods that aren't selling well or too little money on goods that are doing well. It also helps you figure out where there might be opportunities for cost optimization for example, if you know that your company is spending $3 on every pair of pants it sells but only getting $2 back from customers per wear, then there may be ways that you can reduce costs without sacrificing quality (such as using cheaper material).