Pricing a video for wholesale « Videomaker Community Forums

josielink
Member

I made my first how to video and it got great reviews.Now a major company in the same industry wants me to make a how to video with their products for them to sell in craft stores nationwide. what would I charge for something like this and how much do I charge for wholesale for videos? I was told give 35% markup to 50% depending upon how many they purchase .The sales price will be $21.99 per video. They really cant go to anyone else for this because I am the only one in the country who does this partcular type of art with precision. I really have no competition and no one else is doing how to videos in this area of artwork. I created most of the designs everyone has tried to copy and am the pioneer in this area. So I know I kind of have them by the balls. I just dont want to screw myself over or make the price too high.

Posted 4 years ago #
On a Roll
Member

Do keep in mind that as soon as people start buying your video, if you're a good teacher, there will be more people out there who can do what you do, and potentially some of them may develop their own style of doing it. What does that mean? You might not have "no competition" for long!

Honestly, I think your retail price is right on, if not a little high even. For example, I just did a quick check on Amazon.com. Transformers, Spielberg's latest film, is selling for $22 there. I'm seeing a lot of 5-6 disc sets there at $35-$40. Yes, their prices are a bit discounted, but from my experience, WalMart usually has similar pricing. Now, if a director who is arguably the best film maker in history is only pulling $22 a shot in for his video, it takes a lot of guts to sell your video for just a hair less than that.

Of course, that being said, you do have a good point that you're the original pioneer of your artform. That gives you an edge, even if only for a short time. For now, you might be alright asking that price, and in the future, when competition starts building, you may have to give in and drop your pricing. As I said before, Humans have been one-upping each other since the dawn of time. Sooner or later, competition will hit your market, so perhaps your best time to strike is now.

But then, I've never had one of my videos distributed on a national level, so I could be totally wrong.

Posted 4 years ago #
On a Roll
Member

Oh, and this is sort of unrelated, but I thought I'd share another bit of wisdom I learned when I was writing my business plan. There's no such thing as "No competition." Seriously, if you tell investors you have no competition, they'll tell you that you haven't done your homework well enough.

There's always competition. If you're the only person in your market that does what you do, your competition is that people simply won't use your service or product. After all, they've lived their whole lives without it.

I'm honestly not trying to pick you apart here. I just want to point that out so that you (or anyone else who reads this) will remember, you've never got 100% control of your market. The second you think that, you've already lost.

Peace!

Posted 4 years ago #
TheDVshow
Member

It really boils down to where do you fit in? What's your experience, your education, what type of equipment do you have?

In my opinion, the best thing to do is figure out your client's budget then work from there. A company I worked for figured out the client's budget then we figured our costs for what the client needed then multiplied by three. This left room for anything left out in the estimate, plus some contingency funds, and some profit. That way you don't have to go begging every time the client needs something extra, or you run a little over.

Research your market. Who are your potential clients, who's the competition, what do you have to offer that your competition can't, in few words, why would they come to you instead.

You may think you're the only one now but you won't be for long. X-D

Posted 4 years ago #
josielink
Member

I am very well informed on the market and there is no one that comes close to the designs I have created. I own 2252 protected designs.Anytime I see someone even try to copy I shut their website down with my attorney. The only time I saw anyone come close I looked more closely and they were selling my designs as their designs.She had literally taken pics from my website. I had her website shut down the same day. MY question was not if I had competition of which I do not. My question is what do I charge wholesale to the company for a video is it normally 35% per so many thousand markup or would it raise to 50% markup for 10,000. How do you figure wholesale of the video price. I can go on forever with how to videos in this area of art constantly changing with designs form my portfolio. I am also branching out and have hired one of the guys from extreme home makeovers to do a how to on home repairs. So I am not worried about competition. I have a unique product that no one can make without my help. Thats why I can charge 1500.00 for a weekend seminar.
Just need some help on how to price wholesale for mass buys.

Posted 4 years ago #
On a Roll
Member

First of all, I Think I may have hit a nerve, and so I must apologize. Offending you was not my intent.

As far as what you're selling your product for, the numbers you have are roughly in the same ballpark of the numbers I've heard. Honestly, It might be wise to ask your attorney what he or she thinks though. Dealing with contracts (like selling large quantities of your video to a national chain) are sort of a specialty of theirs, and if your lawyer doesn't have a book with what sort of number you're looking for, then they have networks of lawyers across the country who do. But, and don't be offended by this, because it's not just you, but society in general. I get really nervous in this modern "Let's sue the bast**ds!" world we live when giving advice to people who are as "lawyer-happy" as your last post seems to let on. And since the last thing I want is to give someone bad advice that leads to them sicing lawyers on me, for my own self-intrest, I can honestly say that none of my advice should be taken without the consult of an attorney.

Now, as far as my comments about "competition" go, the only thing I was trying to say is that sooner or later, you are going to have some. While your exact creations, and very similar copies of them are your property, creative derivations of whatever form of art you do are not protected. I have no idea what it is that you do, but if someone takes an artform or style, and they do it themselves just a bit differently from the owner of the original concept, legally they can call it their own and sell it. You can send lawyers to them, and threaten to shut them down, and most people will comply simply because they don't have the time or desire to get into a legal battle. But sooner or later, you'll run across some hard nosed artist whose going to call your lawyers bluff, take you to court, and if their product is sufficiently different, win the right to sell their product. And that day will open a door for hundreds of people doing just what she did.

I'm not saying this to rile you up. I'm saying this because I've seen it happen, even in my own field of videography. Several years back, I read a case about a nationally known videographer who sued a smaller company because they had a video product that was very similar to the popular company's. As it played out, the judge decided that since the method of creation was different, and since the product wasn't a true clone, that it was perfectly legal for the other company to offer it. And now, today, years later, virtually every videographer out there, including my company, offers some derivation of the product, the same-day wedding video.

Plus, statistically, companies that hold tight to their proprietary rights struggle a lot more than companies that allow licensing of their product. Look at Apple. If Steve Jobs hadn't come back and rescued them with the iPod, Apple might have completely died. The reason? Back when IBM was licensing rights to build their computers to anyone who wanted to, Apple insisted that they were the only company that could make their hardware and software. And that's why in the computer industry, Macs are the minority, despite that they're almost always the better product.

Maybe instead of threatening lawsuits against anyone who has an idea that's similar to yours, make money off it, by offering to make them an officially licenesed producer of (whatever your artform is)? That way, they can keep making products similar to yours, and for every one that they sell, they send you a percentage of their profits. Essentially, you'd be franchising your artform, and giving it a international market, where currently you're limited only to what you can do on your own. Doing this, you could stand to make money literally for doing nothing. The other artists create and sell the product. You just sit back and take in royalties for other people's work.

Personally, I think that's a brilliant idea. So much so, that if you do it, I think I deserve, say, 20% of your income from using my idea. :-) Seriously, though, nobody likes a hardnose, and you'll build a better reputation for not only your artwork, but also for yourself, if instead of threatening to sue into oblivion the folks who admire what you do enough to try their own hand at it, if you come up with a way for everyone to profit off it.

And like I said, there's ALWAYS competition, even if that competition is just not buying what you're selling. As soon as you think you're the only source of something, you're etting yourself up for inevitable failure. That, or an anti-trust lawsuit.

BUT Take all of this with a grain of salt. Like I said, I wouldn't listen to a word I've said without first checking with a lawyer.

PEACE!

Posted 4 years ago #
josielink
Member

I already license designs. lol. 10,000 for 150 designs and 10 day full on course on how exactly to make them and they license per year. 10,000 each year to reup on license. Im definately not sue happy honey its taken me 6 years to do what I have done and I am not about to let joe shmoe come in and try to copy me without paying me some cash. lol.

my attorney is not a entertainment attorney. He is strictly business ,contracts and copyright trademark.

I GUESS what I will do is offer the video at 5,000 copies for 35% markup 10,000 copies for 50% markup and so forth. I have no idea of how many they usually order. so this is all new to me ...Its a nationwide chain which has 800 stores nationwide.

Posted 4 years ago #
dvdrockon
Member

I feel your pain

Just curious, how did you derive
35% for 5,000 units
50% for 10,000??

If they told you this, you know thats not you negotiating.

and do you have any terms for wholesale distribution, either by choice or request? (ie: lead time to delivery; half up front, half in 30 days...or all in 30 days with return of overage; etc etc)

Also, with a retailer that has 800 storefronts wouldn't you expect the intitial order to be 2-3x800? If not less?
That being the case, why not

35% for 1000
50% for 1000+

And 44-50% seems to be the real retail average markup for $20-40 specialty videos

and

If your video and skill is so specialized you should not be capping yourself at the standard $21.99 or even $24.95 / price per unit. Your speciality video should actually retail as $29.95-39.95.That seems to be a better benchmark for hobby/skill videos where there is previsouly "no competition" or competition that is not worth considering. You should have your videos done to your specs to support your business plan which includes the seminar sales point...then you just happen to offer them at your terms & price point to the retail chain that wants them. They don;t set that price. In wholesale distribution, like you're talking, they are not the "client." If they don't want them...their retail competitor will. In wholesale distribution the goal is sell, sell, sell---to everyone. If you control the market like you indicate, then you have some control of the price point---not the retailer. They want you to think their retail price point is $21.99, then they will suddenly realize it should be $30-40...and you can't re-negotiate.

This theory of pricing is supported by the idea that you can always lower the price. But you cannot raise the price if you start too low. It also places a premium on what you have, which is the only choice out there. You just have to be able to articulate why you start high---with the guarantee to go lower, if need be.

In addition, there is an alternate revenue stream which is the demonstration/advertising/sponsor angle. They could pay a videographer to make your video with their gear. Might not be too successful...but they could try. What would that cost them in time and effort? Something less than that is your revenue from doing your video with their gear. Your arguement is : Or they can pay you, who happenes to use their gear, thereby advertising it. You deserve separate compensation for that. I think you are talking about compensation for this + the wholesale price per unit. You decide what that compensation is, if any. (maybe advertising, maybe a flat rate fee, maybe a "project fee", maybe not a money item but soemthing else...) If it were monetary, I would ask for a project fee in a price range that covers all or part of the cost of the intiial run of videos. That way you spend no or little $$ up front, and bank on the wholesale distribution. No sales? weak sales? you break even. On the first run video this is most important, least you get stuck with thousands of specialty videos you can't unload. If they balked at that...you still offer video, just use a competitors gear. And now you're back to negotiating.

BTW, comparing a $20 walmart mainstream video to a specialty hobby video is silly and not applicable.

Posted 4 years ago #