2. What is the criteria's list to estimate the cost of Collection Company?
The criteria's list to estimate the cost of Collection Company is:
1. Cost of the staff (on the yearly basis)
2. Cost of the infrastructure (office rent, all forms of communication, software purchase).
3. Cost of correspondence
4. Number of claims per employee
5. Total value of the claims per year
The margin / commission is calculated on the basis of costs generated by points 1-4.
I.e:
Cost of the employee per year @ 3 employees 120 000 $ x 3 = 360 000 $
Cost of the infrastructure / rental: 15 000 $
Cost of correspondence: 3000 $
Total: 378 000$
Number of claims per employee per year: 800
Total value of claims per year: 4 000 000 USD
Costs of the collection company = 9.5%
Commission margin is calculated on the basis of the costs of the company in respect of competitors' prices.