To further the discussion, does labor remain a fixed cost (which I have a problem with) when designers come in at 8am and go home when oders are done? (ie: not staying all day)
In that case, labor is not fixed and should, in principle, be counted.
Let's say there are 5 local orders and 5 wire-in orders waiting for your designer at 8 AM. Clearly, she would go home earlier if there were no wire-in orders.
Same is true if your shop has multiple designers, all paid hourly. If 50% of the sale is from wire-ins, half of your designer's time is in fact being spent on filling wire-ins.
The question is how much percentage we should allocate as labor. For the reasons described below, the standard percentage, 25-30%, is almost certainly an overestimate. 10% is a better number.
1) Filling wire-in orders do not involve sales time. If your designer is also a sales rep, s/he isn't spending time on talking to the customer for wire-in orders.
2) Production (i.e., making arangements) in the morning for that day's delivery is very efficient, because there is no idle time wasted for waiting for orders.
Because of 1) and 2), any experienced designer, such as your self
, can make wire-in arrangements at the rate of, say, 6 per hour (one arr every 10 min) in the morning and then go home. Remember that she doesn't deal with phone calls.
If the price of each arrangement is $50, that's $300 total per hour. If you are paying this designer $15, labor is only 5% ($15/$300).
In reality, things aren't this efficient. So 10% is more realistic.