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”Knowing how your profits are calculated
will help you estimate how much your group can make and set goals.”
CHAPTER 7
Fundraising Profit Calculators
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.
How Product Fundraising Profits are Calculated
Most fundraising companies use this system to determine fundraising profits:
Product Price – Wholesale Price = Fundraising Profit
To determine the percentage your group is getting, use this equation:
Profit / Product Price = Profit Percentage
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.
How Rada’s Fundraising Profits are Calculated
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.
Catalog Price of $5.00 – Wholesale Price of $3.00 =
Fundraising Profit of $2.00
Profit of $2.00 / Catalog Price of $5.00 = Profit of 40 Percent
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.
Call Rada Customer Service for answers to your
fundraising questions, 1-800-311-9691.
Chapter 7 Wrap-up
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:
- Most fundraising companies use this system:
- To determine the percentage your group is getting:
- Most products vary in the profit percentage they provide, but your sales will likely average the percentage the company advertises.
- Research how shipping, catalog and sample prices will affect your profit.
- Rada provides a 40 percent profit to fundraising groups.