Co-Op Funded Catalog Pages
Catalogers that sell branded merchandise (merchandise that they did not design and source themselves, merchandise they purchase from another branded vendor) have challenging decisions to make.
- Do you offer merchandise you know will sell very well, and pay for the cost of mailing the pages out of your budget?
- Or, do you accept funding from the branded vendor, allowing them to feature their merchandise on your spread, incurring no paper/postage/printing costs?
Here's an example of what I'm talking about:
Catalog Mailing: Spread Analysis, Circulation = 1,000,000 | ||
Regular Merch | Co-Op Funded | |
Demand | $80,000 | $40,000 |
Final Fulfillment | $68,000 | $34,000 |
Net Sales | $54,400 | $27,200 |
Gross Margin | $27,200 | $13,600 |
Less Marketing Costs | $16,000 | $0 |
Less Fulfillment Costs | $6,528 | $3,264 |
Variable Operating Profit | $4,672 | $10,336 |
Demand / 000 Pages Circ'd | $40.00 | $20.00 |
Customers Purchasing | 1,159 | 580 |
Which spread would you rather feature in your catalog?
- The spread that causes 1,159 customers to purchase, generating $80,000 demand and $4,672 profit?
- The spread that is paid for by vendors, causing 580 customers to purchase, generating $40,000 demand and $10,336 profit?
Labels: Co-Op, Co-Op Funding, Vendor
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