With their high overheads ...

[pars]

Dear all:
What is the meaning of the following passage? It is from the book The Asian Trade Revolution of the Seventeenth Century, by Niels Steensgaard, p.p. 413-414:

"With their high overheads they were not in all cases able to compete; their immediate victory concerned the goods especially burdened by protection costs and which followed routes so long and difficult to survey that the market was to a high degree non-transparent."

The passage is about East Indian Companies.

Many thanks in advance.

 

[probus]

Overheads is a technical term in accounting. A business firm must pay to buy or manufacture whatever it sells. The cost of doing so is called irs cost of sales. The other expenses of running its business are collectively called overhead: rent, utilities, and so forth.

 

[SoothingDave]

It's also saying that they were only able to be profitable while operating in areas with secret knowledge (routes) and with high costs ("protection costs" i.e. paying off the right parties for free passage). Where the goods command a high cost because of that, their extra overhead costs can also be absorbed into the costs the end customer pays.

 

[jutfrank]

I think it's saying they were successful only with very high-value products (spices, silk, etc.). This is because they had the money to pay for protection against piracy, presumably, and also the means to transport the goods vast distances across oceans. I think it's also saying that because the market was non-transparent due mainly to these vast distances, they were able to keep prices high, since any competitors were unable to gauge what prices ought to be.