Mar 9, 2006

Can you really afford that $20 business?



Silly question - or so it seems. Recently, a couple of people suggested that the price to join ScrapBiz is too high. I had to laugh. First of all, you're starting a BUSINESS - you can't start one for free. Second of all - my members have told me from time to time that the price to join ScrapBiz is too LOW. The amount of resources there are worth far more than what they pay.

Also, we keep our price high mainly to weed out anyone looking to just buy wholesale for themselves. If you want to be a "hobbyist" and just buy for yourself at a discount, then I suggest one of the low "cost" direct sales companies.

But, if you want to build a real business and make decent profit margins that allow you to run your business, then you can't afford the $20 business.

Let's do a little math:

Let's say that you joined a direct sales company and sold $500 in products each month. Assuming you're getting 25% commission or profit for those sales, you would make $125. BUT, the true wholesale price on the product is half of retail. So, if you are taking home $125 (half of the $250 profit on $500 in sales), then the direct sales company is ALSO taking pocketing $125. Do that for 12 months straight and you have essentially given the direct sales company $1500 for the privilege of being there. So the "cost" of that $20 business is really $1500.

Now, say you joined ScrapBiz instead. Your costs for the first year would be $99 for our start-up guide and $100 for four quarters of our member support program. Let's say you sold the same $500 a month that you did with the direct sales company. That means that each month you make $250 after the cost of the goods sold. We don't make anything out of that $250. So, over the course of a year, you make the WHOLE $3000 profit (assuming you are selling $500 each month). But, you only pay us $199 dollars over that year - not the $1520 you paid the direct sales company.

So, IS the cost of joining ScrapBiz REALLY too high??? We're talking $1520 vs. $199. You decide...


3 comments:

Anonymous said...

Wow! Since you put it THAT way - it makes sense. Thanks for making me think!

Sara said...

Now that it is in perspective, I checked out your site and love the idea.
How can I get started?

:) Thanks, Sara.

Kim said...

Check out the products page at ScrapBiz.com for information on how to join.

~Kim