Pre-production planning and preparation – Production schedule, protocol and reporting
Location search, permits & fees – Location
1 – Ten hour BetaCam SP location shooting day
Lighting Director – Lighting Grip equipment – Teleprompter and operator
Make-up for on-camera talent – Location expenses, meals
Still cameraman, film, processing, prints – Beta SP tape stock
Stock music for each of the two spots and Q&A
Transfer of dailies to VHS with time code
2-hour studio shoot of props/product included with post-production
8 hours post production to completion
One 1” master
Four VHS of completed spots and program

Note: This estimate is a look at a specific budget we completed. It cannot represent every situation. However, it is a good overview. Make-up, specialty props, and an infinite list of other demands can push the costs through the roof. According to a major ad agency in New York, its typical budget for a 30-second spot is $92000.00.

Pre-Production

Pre-production planning and preparation – Production schedule, protocol and reporting
Location search, permits & fees – Location
3 – Ten hour BetaCam SP location shooting days
Lighting Director – Lighting Grip equipment – Teleprompter and operator
Make-up for on-camera talent – Location expenses, meals
Still cameraman, film, processing, prints – Beta SP tape stock
Stock music for each of the two spots and Q&A
Transfer of dailies to VHS with time code
2-hour studio shoot of props/product included with post-production
45 hours post production to completion
One 1” master
Four VHS of completed spots and program

Note: This estimate is a look at a specific budget we completed. It cannot represent every situation. However, it is a good overview. Make-up, specialty props, and an infinite list of other demands can push the costs through the roof. According to a major ad agency in New York, its typical budget for a 30-minute infomercial is $150000.00.

If your product does not have the required mark-up to meet this criteria, value enhancement is added.

As shown, a $34.50 item ($29.95 + $4.55 postage and handling) allows for a $17.17 return to cover the cost of the product, residuals, amortization, and provide a profit.

COD’s will increase sales by 33%. However, you must ship within 48 hours; you will probably get 1/3 of the COD orders back; although you charge more S&H for COD’s, your cost of sales may be as much as $2 higher reducing your net on COD’s to $15.33. Your back-end marketing should make-up for any losses.

Up-sells (having the order taker offer the caller a multiple sale) should increase your volume by 33% to 50%. It is very effective.

Strong back-end marketing will provide a reorder factor of an estimated 3 to 6 times. Ancillary sales to repeat customers are another profit center. Your mailing list could be worth as much as 10 cents per name to over 200 list brokers. This will increase your revenues to $20 per customer! Amortization of production costs normally occurs within 90 days.

If your product does not have the required mark-up to meet this criteria, value enhancement is added.

COD’s will increase sales by 33%. However, you must ship within 48 hours; you will probably get 1/3 of the COD orders back; although you charge more S&H for COD’s, your cost of sales may be as much as $2 higher reducing your net on COD’s to $56.01. Your back-end marketing should make-up for any losses.

Up-sells (having the order taker offer the caller a multiple sale) should increase your volume by 33% to 50%. It is very effective.

Strong back-end marketing will provide a reorder factor of an estimated 3 to 6 times. Ancillary sales to repeat customers are another profit center. Your mailing list could be worth as much as 10 cents per name to over 200 list brokers. This will increase your revenues to $20 per customer! Amortization of production costs normally occurs within 90 days.

“800” Revenue Tracking Example #3

If your product does not have the required mark-up to meet this criteria, value enhancement is added.

Per Inquiry Broadcast Airtime

There is a one-time $1500 cost (per product or commercial) to go into P.I. time. Some P.I. stations will not allow a competitive product to air P.I. While P.I. is an ideal vehicle, it is not always available; it is uncontrollable; you can be bounced out very easily; and all quality P.I. networks want a record of accomplishment first.

Caution: In some cases, P.I. commissions extend to back-end and up-sells. Some P.I. networks require that the product not be available in stores. P.I. time is often restricted if a product is ingested or applied to the body.

Per inquiry (P.I.) Stocking Cable Channels

Under these conditions, the cost of P.I. time is so high that much higher mark-ups are often required. However, even at a close break even, the sales are normally quite high and the opportunity for continuity sales, re-orders, mail list leases and ancillary marketing often make up for such close margins.

Most P.I. avails do not accept cosmetics, nutritional or any other product that is put onto or into the body.

Some P.I. networks require that the product not be available in stores.

This is a revenue-tracking chart. It shows the gross revenue of a product and the typical charges one faces with direct response television.

If your product does not have the required mark-up to meet this criteria, value enhancement is added.

Lead Generation Converted to a Sale

Lead Generation attracts a substantially higher volume of calls. These calls are answered electronically. Samples are sent. Telemarketers call back to close and up-sell.

Costs associated with “900” services are budgeted based on the service provided. The example above includes the cost of airing the commercial, providing the telephone service to electronically answer the call and electronically record information from the caller. In addition, the cost of printing and mailing a .37 first class bounce-back is included.

If one were to simply provide information on the “900” service as is the case with horoscopes, the costs go down to 68 cents per minute for everything.