Total breakdown of a product sale
product breakdown
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Community / Forum / Free-For-All / Total breakdown of a product sale
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product breakdown
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If the product is sold on Quirky.com, then ideator (inventor) gets $10 x 0.3 x 0.375 = minimum $1.12 per unit.
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If the product is sold elsewhere, then exact numbers can provide only Quirky. But it should be close to ($10 / 2.5) x 0.1 x 0.375 = $0.15
They will not disclose costs and bills to us. The payout I believe is a royalty type amount, it doesnt matter how much it cost to make, the percentage is fixed to the sale price, but in the case of wholesale sales the price from which that percentage comes is a fraction of the retail tag price, some say half.
The easy way to remember the payout is about $0.12 per dollar of retail sale price from Qs online store, and about $0.04 per dollar of wholesale price to brick and mortar retailers.
@Robert Difference between direct/indirect sales is around 7-8 times, not just 3. See my sample above.
Since the wholesale price is about 1/3 the retail price, Robert's "...about $0.04 per dollar of wholesale price..." can be thought of as about $0.013 per dollar of retail price for units sold wholesale. (Useful since we only ever know units sold and retail price.)
So what is the opposite? What does Q keep on an item that sells for $10?
If the retail price is $10...
...Quirky takes in $10 from Quirky.com sales and gives the community $3 - leaving it with $7.
...Quirky takes in about $3.33 from wholesales and gives the community about $0.33 - leaving it with about $3.
Ah, but when they sell in volume, the production costs are driven down and profits soar. Does the community get any of the adjusted profits? No one will say.
Every product will have different percentage breakdowns because each product has different cost of production and a different market price to fit into. Some products may have a small profit window in order to compete with other similar products.
@Clinton - Thanks for posting the information. So basically an item that retails for $10, has to be produced for less than $3.
Yep. In fact, since they have to cover the cost of QHQ, staff, design and development, then packaging, transportation and warehousing - I'd guess they would want the actual cost of the materials and factory to manufacture the product at 25% of the $3.
So, when you buy that $11 set of four Solos, my estimate is each hangar probably cost 20 cents to manufacture.
So, for the $11 retail price Solos sold at wholesale.
(my rough guess)
$7.37 goes to the retailer as a wholesale discount.
36 cents goes to the community, including the inventor.
80 cents pays the manufacturing costs of the product.
$2.46 goes to Quirky for all other costs.
IMO..Unless your last name happens to be the *IRS* you'll not see the exact bottom line breakdown.
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