Private Label Budget calculation

 

                         Budget required to launch a Private Label product

 Let’s calculate:

 It involves 3 basic costs:

·       Reviews cost

·       Burning cost

·       Inventory cost

                                                 

·       Reviews cost

 To be ranked on first page we need to get reviews.

 a)   To get 10-15 reviews we must have 50 sales at full price:

  50 * selling price = 50* $9.99=$499.5 (Sale price)

·                          50* landed cost =  50* $1.60 = $80 (Product cost)

 Note:

·       Selling price: We will pick selling price from Amazon.com

·       Landed cost: We will pick Landed cost from Alibaba.com

 

b)   In order to get reviews from Listing Promoter we will pay him $5 for each review:

Let’s suppose Reviews are 15 against $5 for each review:

 $5=1 review

 $x=15 reviews?

 $5*15=$75

·       Burning cost

    Check against which keyword you want to rank:

 a)   Lemon squeezer press requires let’s suppose 70 sales per day to rank on page 1 for 7-14 days.

Sales per day= 70

Days= 14

70*14= 980

(This means we need to do 980 sales to rank on page 1)

 

              Selling price= 980*9.99=9720.2

·       Here 980 is the sale we need to do to rank on page 1.

·       9.99 is the Selling Price of keyword( lemon squeezer press) taken from Amazon.com

 b)   Per Unit Landed Cost:

·     Landed cost= $1.60( Taken from Alibaba.com)

·     Sales to do to rank on page 1*landed cost

·     980*1.60=$1568

·       Inventory cost

3.    You must have minimum 1000 units for 2 inventory

             Units=1000

Per unit Landed cost=$1.60                                      

1000*1.60= $1600

 Calculation:

Overall cost= Reviews cost+ Burning cost+ Inventory

 Reviews cost:

 ·       Sale price=50*9.99=$499.5

·       Product cost= 50*1.60=$80

·       Listing promoter: $5 per review:

Reviews=15

Each review=$5

15*5=$75

           Burning cost:

·       Sales per day=70

·       Days=14

·       70*14=980

·       Selling price=9.99*980=$9720.2

·       Landed cost= 1.60*980= $1568

Inventory cost:

·       Minimum units=1000

·       Per unit landed cost=$1.60

Inventory cost= 1000*1.60=$1600

 

Overall cost= Reviews cost+ Burning cost+ Inventory

Overall cost= ($499.5+$80₊$75) + ($9720.2+$1568) + ($1600)

($654.5+11288.2+1600)=$13542.7

 

_Note: Total cost $13542.7 does not include PPC charges.

Let’s suppose: 2000 for PPC Campaign

$13542.7 + 2000= $15542.7

_{Grand Total=} $15542.7

 _Conclusion:

 _{So to sale our product which is (Lemon squeezer press  ) we need  minimum $15542.7 budget.}