Cost Analysis

Because of the existing business model - paper textbook sales through bookstores as a primary sales avenue, the company has experienced great loss over the past couple of years as seen in the quarterly financial statement to the left. Cost of sales is not extravagant but the operating and administration expenses for paper textbooks is quite significant. Transitioning to purely digital products will incur a higher cost of sales because the sales representatives will need to take more time obtaining and converting customers in the new digital technology space but the operating and administration expenses will be greatly reduced. 

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