Advance base for shrinkage

[carpediem]

hello to all!

i found this interesting forum since a few weeks. i plan to start my own snack box business next year. sorry for my english - i´m from germany and dont often speak it :-)

i understand shrinkage is one of the variables every snack box operator has to deal with. its an inherent part of pricing. my question: what is the advance base (hope i used the right word) for shrinkage? when you talk about 20 % theft rate f.e.:

did it mean there are 20 % unpaid items (80 from 100 items get paid, 20 items don´t)?

or 20 % of retail price (you pay 50 $ to fill the box, you deal with 100 % markup, so in best case there are 100 $ in [when all items bought], but because of 20 % theft there are only 80 $ in the box?)

or 20 % of your invested money (base is your cog)?

it´s a very important kpi to me cause it makes a big difference.

thank you

happy new year :-)

sebastian

[dogcow]

21% as in 20% of the items in the box. so i put 32 items in the box 7 items are missing thats about 21%

to get a kpi i take that number and look at it with respect to the average COGS , so for example

say my average cost of goods (my cost) = $0.23 , avg shrinkage is 21%, with 32 items in each box , that means im losing about $1.50 per box, to theft.

it doesnt matter that it should have made $7.00 in revenue, if that makes sense