Tuesday, December 12, 2017

How Much Can You Make Selling Your Own Video Titles? Scenario #2

November 5, 2013 by  
Filed under All Posts, Special Interest Video Biz

Money in handDid you run the numbers to see how much money you can make producing and selling your own videos?

Today I’m going to share another money making scenario.

Scenario 2:”High Price, Low Volume” Model

With the “low price, high volume” model we introduced last week, your goal is to attract many customers who will buy at a low price. Where you can make much larger profits is in producing more than one title on your topic. That way, if your customers like one, they will likely buy more related titles from you if you’re selling them at a lower price, say 8-9 DVDs a day at $20 each, you’d bring in $60,000 over the course of a year.

However…when selling “Special Interest” or niche titles, the prices you sell them at are usually higher – often much higher. Joe Clokey of San Luis Video Publishing in Los Osos, California, is one of our associates who has a full-time video publishing business. He sells 2-DVD sets, each DVD containing two 20-minute programs, to schools at $400 per set! The actual cost for him to duplicate them is about $2.00. Now that’s a good profit margin! Yes, he sells to fewer people but he doesn’t have to sell to as many to make the same income because his audience, agriculture teachers, is very targeted.

Assume you sell a title, or series, at a price of $120 each and aim for 10 sales a month. This is a reasonable price point you could get selling to schools and institutions. That’s the same amount you’d get for selling 6 times as many at $20 so imagine what you could make if you sold one copy per day! Your one-month income selling 30 copies at $120 equals $3,600. In 5 years that one DVD could make you $216,000.

This pricing model is the one I am most familiar with when selling to schools. Although that price does seem high, at that level, schools are getting what is called public performance rights. Those are the rights to show a video to a large public audience versus the home use versions we are used to renting at Netflix or your local video rental store. Schools and institutions expect to pay more.

The other thing with that price point is it makes it more profitable to go through distributors. The general practice when working with distributors is you sell your DVDs to them at a discount or wholesale price, commonly 40 – 50% off retail. You do get less profit per sale but that is made up in having another sales outlet doing the work for you. In fact, this may be the only way you wish to distribute your DVDs, especially if you only have a few titles or don’t want to set up your own eCommerce site and do your own marketing.

While you want to make money selling your titles, you don’t have to stop there. Next week we’ll tell you how to further increase your profit potential in this business.

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