Another potential advantage is the development of economies of scale. Developing economies of scale refers to how businesses can optimize profits by scaling up their operations while pursuing greater efficiency. For example, suppose the bakery must pay $1,000 a month to rent its building. Whether the bakery produces a hundred cakes or a thousand, the cost of rent remains the same. But at higher sales levels, the profit-to-rent ratio is higher. In other words, the cost of rent is proportionally less if the bakery can achieve higher productivity. Economies of scale in the area of distribution logistics, for example, are how big-box retailers can charge lower prices than small retail businesses. While small businesses might not be able to compete with the high levels of efficiency that large companies achieve, they can use economies of scale to out-compete other small businesses.