”Knowing how your profits are calculated
will help you estimate how much your group can make and set goals.”
Product fundraising can be frustrating if you don’t understand how the profit your group will receive is calculated. Fundraising companies make profits from sales as well, but what portion of the sales will you get as the fundraiser? This is something you should talk to the company about before you make any decisions. Knowing how your profits are calculated will help you estimate how much your group can make and set goals. It will also give you a realistic outlook on the success of the fundraiser, which can help you decide if it’s the right one for you.
Most fundraising companies use this system to determine fundraising profits:
To determine the percentage your group is getting, use this equation:
A company may guarantee you a certain profit percentage, but that doesn’t mean each product will provide that percentage of profit. Depending on the prices of each product, some may provide slightly over that percentage and some may provide slightly under that percentage. Your sales will usually average the percentage the company advertised. It’s important to understand that not every product will provide that exact percentage.
In picking your fundraiser, you’ll want to examine any other costs that could be associated with your overall profit, like shipping, catalogs and sample prices. These things can add up quickly and take away from your end profit.
At Rada Mfg. Co., we provide a 40 percent profit to fundraising groups. Here’s an example of how our fundraising profits are calculated using our product catalog. In this example, the product’s catalog price is $5.00.
There are other profit benefits to working with us too. The Rada Order Takers ask each of your supporters to pay $0.50 toward shipping. Often this adds up to be slightly more than the actual shipping and adds to the fundraising profit. Also, Rada fundraisers are allowed 10 free catalogs a year and if the fundraiser places a retail order of $1,000 or more the catalog charges are waived. (This is the type of stuff you want to look for when choosing your next fundraiser.)
Your church, club, team, school
or youth group will work directly with
the factory to make 40 percent profit.
It’s always good to have a talk with your fundraising company about where their products come from, how they’re made, what the wholesale price is, and what their mark-up is. When you know this information, you can see if the percentage you’re getting matches what the company advertises. You can also project your profits and set better goals.
So don’t be in the dark about how your company calculates its fundraising profits. Here’s a little review:
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