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Tuesday,Oct 08,2013

1) Uncommon Value The very first thing a DRTV shopper looks for is pricing that knocks their socks off.  They almost anticipate it.  For the past 30 years, they have been hearing “But wait, there’s more!” The entire genesis of television retail revolved around providing interesting products at awesome prices! When a product does not do well on TV, it is the first place all attention is focused.  Producers, hosts, sales managers, directors, buyers and VPs all look at the price.  Although this may or may not be the problem, it is the first consideration because it seems the most obvious culprit.  So, lets talk price. Most retail networks or infomercial companies are looking for a profit margin around 50%.  Some are slightly higher or lower, but as a rule of thumb think 50%.  That means that if you plan to sell your product on TV for a price of $40 per item, you need to be able to manufacture it, package it, market it, pay your presenter, make your own profit and cover any other overhead expenses for around $20 per item.  Right away, this eliminates many, many products.  Television comes with a ton of expenses.  It is not a cheap endeavor.  Think of the expense of all the staff, buildings, equipment, air or satellite time, etc… Heck, just the electric bill for most studios I have worked in is probably 5 times my annual income!  HSN employs around 6,700 people to make all that magic happen! Due to this, it takes  a big chunk of the selling price to cover all those expenses and make a decent profit.  Unless you are shooting your own infomercial with your own crew, booking the airtime personally and cutting out everyone else, you need to plan on providing your product for half of what it will sell for…and your final selling price must be competitive!


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