munitalP
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- Oct 10, 2006
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It was suggested that a new thread was started to clean up from the previous one, just to stop the wading through so many posts to get to the end.
On that note, it was also decided to make things a little clearer as to costs and how the price of each tag came about.
Now there are some variables such as there will not be postage costs for every tag – I know that, but without DEEP-THOUGHT doing the calculations for me, there is no way to predict the number of purchases per person, so a simple method of a 1:1 ratio is used, i.e. for every tag, there will be 1 envelope and 1 stamp – simple logic.
We have fixed costs:
TAGS – $1,312.85 ($1,193.50 + GST) per 500
Padded envelope - $0.68 each
Postage - $0.80 each (again there is some variance here so a single figure is set)
Paypal fees – a calculator may be found here (PayPal Fee Calculator by Ryan Olbe) – This was averaged at 10% - again there is variance but it is a reasonable good average.
Based on these costs and assumptions, the following applies:
To be cost neutral after the sale of 500 tags, the selling price will be $4.56 each.
I personally don’t think we can achieve anywhere that number of sales in the short term, so after fiddling with a few numbers, playing with an Excel spreadsheet, I thought that we should be able to sell 300 (307 to be precise) at a higher price ($6.10) to become cost neutral on this project.
Now, here the variables come into play quite a bit, less envelopes, fewer stamps and suddenly, a blue sky number in the vicinity of 250 is more like reality for that cost neutral scenario, but not forgetting that this is an estimate.
So, in a nutshell, we as a group have purchased approx 160 tags as of Friday 29 Jan. That is a little over half way to the cost neutral situation based on 300 sales without the blue sky subtractions.
So, what about the left over tags?
This is a good question. I don’t think that we will sell them fast – maybe they will eventually be sold, maybe not, but looking at our sales figures so far, it is easy to see the group got keen on the idea, then the sales dropped rapidly over the period of a week with a small reprise toward the end. A good snapshot methinks as to future sales.
A decision will be made as to the remaining tags as time goes by, but please remember, this is not a profit making venture, it is a cost neutral venture, no-one is going to lose money, and no-one is going to make money. I can say that a number of tags left over will be set aside for members who have purchased tags who get them broken or lost as a replacement.
Obviously this will be very limited and on a first come basis.
I hope this explains clearly enough the costing and how I set it.
Thanks everyone for your support so far toward this project
munitalP
Comment from admin:
For full discussion see http://www.frequentflyer.com.au/community/playground/aff-luggage-tags-some-ideas-17432.html
On that note, it was also decided to make things a little clearer as to costs and how the price of each tag came about.
Now there are some variables such as there will not be postage costs for every tag – I know that, but without DEEP-THOUGHT doing the calculations for me, there is no way to predict the number of purchases per person, so a simple method of a 1:1 ratio is used, i.e. for every tag, there will be 1 envelope and 1 stamp – simple logic.
We have fixed costs:
TAGS – $1,312.85 ($1,193.50 + GST) per 500
Padded envelope - $0.68 each
Postage - $0.80 each (again there is some variance here so a single figure is set)
Paypal fees – a calculator may be found here (PayPal Fee Calculator by Ryan Olbe) – This was averaged at 10% - again there is variance but it is a reasonable good average.
Based on these costs and assumptions, the following applies:
To be cost neutral after the sale of 500 tags, the selling price will be $4.56 each.
I personally don’t think we can achieve anywhere that number of sales in the short term, so after fiddling with a few numbers, playing with an Excel spreadsheet, I thought that we should be able to sell 300 (307 to be precise) at a higher price ($6.10) to become cost neutral on this project.
Now, here the variables come into play quite a bit, less envelopes, fewer stamps and suddenly, a blue sky number in the vicinity of 250 is more like reality for that cost neutral scenario, but not forgetting that this is an estimate.
So, in a nutshell, we as a group have purchased approx 160 tags as of Friday 29 Jan. That is a little over half way to the cost neutral situation based on 300 sales without the blue sky subtractions.
So, what about the left over tags?
This is a good question. I don’t think that we will sell them fast – maybe they will eventually be sold, maybe not, but looking at our sales figures so far, it is easy to see the group got keen on the idea, then the sales dropped rapidly over the period of a week with a small reprise toward the end. A good snapshot methinks as to future sales.
A decision will be made as to the remaining tags as time goes by, but please remember, this is not a profit making venture, it is a cost neutral venture, no-one is going to lose money, and no-one is going to make money. I can say that a number of tags left over will be set aside for members who have purchased tags who get them broken or lost as a replacement.
Obviously this will be very limited and on a first come basis.
I hope this explains clearly enough the costing and how I set it.
Thanks everyone for your support so far toward this project
munitalP
Comment from admin:
For full discussion see http://www.frequentflyer.com.au/community/playground/aff-luggage-tags-some-ideas-17432.html
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