(fa) S B CC Promo Card MATH: Model 2 Accounting w. Gross Revenues
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200,000 cards distributed
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Model based on Certain Assumptions (listed below)
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assume 25% activated
50,000
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80% buy through of 3 cd's= 40,000*3
120,000 cd's, 40,000 shipments @ $4.00 per shipment
$1.00 margin cd sales, $1.00 margin shipping (25%)
Gross Revenues (gr): $1,318,800 cd sales
Gross Revenues (gr): $160,000 shipping
Costs of CD Sales: ($1,198,000)
Costs of Shipping: ($120,000)
Net Revenues $120,000 cd sales
Net Revenues $40,000 shipping sales
Total Gross Revenues $1,478,800
Total Costs of Sales ($1,318,000)
Net Revenues: $160,000.00 Sub Total
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10% buy through of 2 cd's= 5,000*2
10,000 cd's, 5,000 shipments @ $3.00 per shipment
$1.00 margin cd sales, $0.75margin shipping
Gross Revenues (gr): $109,900 cd sales
Gross Revenues (gr): $ 15,000 shipping
Costs of CD Sales: ($99,900)
Costs of Shipping: ($11,250)
Net Revenues $10,000 cd sales
Net Revenues $3,750 shipping sales
Total Gross Revenues $124,900
Total Costs of Sales ($111,150)
Net Revenues: $13,750.00 Sub Total
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10% buy through of 1 cd= 5,000 * 1
5,000 cd's, 5,000 shipments @ $2.00 ea
$1.00 margin cd sales, $0.50 margin shipping
Gross Revenues (gr): $ 54,950 cd sales
Gross Revenues (gr): $ 10,000 shipping
Costs of CD Sales: ($49,950)
Costs of Shipping: ( $7,500)
Net Revenues $5,000 cd sales
Net Revenues $2,500 shipping sales
Total Gross Revenues $ 64,950
Total Costs of Sales ($ 57,450)
Net Revenues: $ 7,500.00 Sub Total
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50% of the 80% of 3 buy throughs reload
12.5% of reloads from total distribution
25,000 reloads @ $10.00 ea
Gross Revenues $250,000 card sales
Profit Share Coke ($125,000)
Profit Share *NMF ($12,500)
Profit Share Cost (137,500)
Electronic reload, therefore no additional cost
for manufacturing of card
Net Revenues $112,500.00 Sub Total
*National Music Foundation
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Revenues from advertising (hypothetical numbers)
Amount of Cards = 200,000
Production Cost per card= $0.25
Sale Price of Card = $0.50
Gross Revenue: $100,000
Cost of Card ($ 50,000)
Net Revenue Card $ 50,000
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Total Gross Revenues $2,018,650
Total Gross Costs ($1,674,100)
Total Net Revenues $344,550.00
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Cost of advertising = $0.00
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No additional sales from the reloads
factored into this model
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Model also doesn't account for any "viral impact"
ie. promo card recepients telling other non-recepients
about the site and its value.
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Assumptions
only 25% card activation
only 12.5% card reload
$1.00 margin on cd's
25% margin on shipping
Card Production cost = 0.25
Card Mark= up 1 time
Card margins = 0.25
Conservative assumptions?
Conservative numbers?
Alternative numbers and assumptions?
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