I wanted to share something I heard about with you. It’s a class that a Stamping Business Owner did… it’s completely unprofitable… and it should be a warning to all of you.
The class price was $15… or free if you purchase $25 in product. These, ‘Free If…” classes almost never make you the money you deserve… if they make any money at all.
But don’t take my word for it. Let’s crunch the numbers.
If someone purchases $25 in catalog product, you make approximately $8 (assuming 32% commissions and Instant Income).
So, you’re already losing $7 in fees when you sell product, and cutting your profits by almost 66%! That’s exactly what should NOT happen.
Then, let’s assume you’re spending $4 in product for each of your class attendees.
Now you’re making $4 per person.
If 7 people show up to your class, you’ve made a total of $28 in profit.
If it took you, say, 7 hours total to plan, prep, market, hold and close the class, you’ve made $4 per hour.
Not good. Not profitable. And not what you deserve.
If you just charged the $15/person X 7 people – $4/person product costs, your profit would have been $77, or $11/hour. Almost 3X as much profit!
Much better, and more in line with what you should get paid.
So, how do you turn it around. Here are two steps:
1. Crunch the numbers when you’re planning a class.
Make sure your costs and what you’re charging allow you to get paid a decent hourly wage.
2. Don’t devalue your knowledge just to sell product.
It undermines your position as an authority, and, because of the margins on your product, almost always reduces your profit dramatically.
There’s no good business reason for you to hold an unprofitable class. And there’s no excuse for you to do so unknowingly. If you see someone else doing it, don’t assume they’re profitable. There are plenty of ‘successful’ Stamping Business Owners who aren’t very profitable. Think it through for yourself before you make a decision on whether or not its right for you.
To your continued success,