Where the money goes on a USD 60 serum, and what 5 more points of retailer margin cost the brand
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The prompt
Lumora (a fictional skincare brand in the United States) sells a serum at a shelf price of USD 60 through a specialty beauty retailer that keeps 45 percent of the shelf price. Lumora's costs per unit, as a share of what it receives, follow a typical large beauty company: cost of goods 26 percent, advertising and promotion 32 percent, selling and admin 19 percent, research 3 percent. What does Lumora earn per serum? The retailer now asks for a 50 percent margin. If Lumora keeps its spend per unit the same, what happens to its profit per serum?
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