The Business of Fundraising – Lower Prices, Higher Profits

The Business of Fundraising – Lower Prices, Higher Profits

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Find out how you can boost your fundraising profits by lowering your prices.  Big retail stores do it, and you can too!

How often do you find yourself buying more than you need because of a “2 for 1” or “Buy One Get One 1/2 Off” sale?  Or shopping at a store you wouldn’t normally shop at because when you spend $35 or more, you get 20% off?

Many retail stores benefit from offers like these because they encourage people to buy more than they normally would.  It also benefits customers because although they’re buying more at one time, they often save money in the end.   You can use this to your advantage at your next fundraising sale and end up making more by charging less!

Let’s use lollipops as an example to see how you can come up with a fundraising offer for your next sale:

Each lollipop costs you $0.25.  You sell them for $0.50 each.  That means you’re making a profit of 50%, or $0.25 on every sale.

You might consider selling them for $0.50 each with a special offer of 3 lollipops for $1.  Basically, you’ll be selling 2 and giving away 1 free.  If each lollipop costs you $0.25:

–  $0.25 x 3 lollipops = $0.75 (your cost)

–  $1.00 (selling price) – $0.75 (your cost) = $0.25 (your profit)

Hmmm…. The offer was great, but the end profit doesn’t look so good.  In fact, that ends up being only 25% profit!

Let’s try it again.  This time we will sell lollipops at $0.50 each with a special offer of 5 lollipops for $2 – or “Buy 4, Get 1 Free”.  Each lollipop still costs you just $0.25.

–  $0.25 x 5 lollipops = $1.25 (your cost)

–  $2.00 (selling price) – $1.25 (your cost) = $0.75 (your profit)

That looks much better.  And your profit with this offer would be over 37%!

This offer is good because $2 is an easy, round number that people can reasonably spend, 5 lollipops is a realistic number of lollipops to buy, and the offer is still profitable for your fundraiser.

With this offer, most of your sales will probably still be for just one or two lollipops, and since you sell those at the regular price of $0.50 each, you will still make 50% on those sales.  However, the offer is good enough that many people will buy more, thereby boosting your sales.  For example, someone buying 3 lollipops could think, “Why not add just one more and I’ll get another one free!”  Also, people who were just going to buy one could see your offer and decide to buy five as a treat for friends or coworkers.  Around the holidays your offer could pay off big with people buying 5, 10 or even more lollipops for friends and family.  Each sale of 5 lollipops will only be a few extra cents, but those extra cents add up to dollars pretty fast!

Lollipops are a great product to use, but you can also come up with special offers for products like candy bars, beef snacks, wristbands and most other direct sale fundraising products.

A great tip for any product is to buy online at the eFundraising Store because shipping is free so you won’t have to subtract shipping costs from your final profit.  Also, at the online store you get quality products at wholesale prices, so you can cut costs without cutting quality, and that’s always good for sales!

 

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