You may get a bit of a shock if you look at how the actual math works in your LipSense business.
300pv orders, for 40% discount
(PV = Points Value)
MONTH 1
Your first month in business!
SeneGence Sign up — $66.25
305 pv order costs us (in PA with 6% sales tax + $15.50 S&H) — $415.43
Selling 14 color and 13 gloss at full retail = $646.60
– $66.25
Profit = $164.92
BUT YOU HAVE TO DO ANOTHER 300 PV order next month.
MONTH 2
So, adding in your profit from last month, this will cost you $250.51.
You are $250.51 in the hole now, even after selling all of that for them in the first month, because you had to front load and buy more stock.
Sell it all, and your profit is $396.09 ... but wait, you need to buy more stock ...
MONTH 3
Use your profit again to place 305 pv, that costs you $415.43, you are finally up a whopping $19.34 cents!
Sell it ALL, and you are profiting $665.94 for three months of hard work. That is $55.49 a week.
And that is ONLY if you are managing to sell 14 colors and 13 glosses every single month (or the equivalent). But you don’t have that profit do you? Because you have to buy more stock ...
MONTH 4
Use your profit again to place 305 pv, that costs you $415.43, so that $665.94 profit? Well it’s not profit, because you need to buy more stock. After you do that you are left with $250.51, and if you sell it all again, you’re now at $897.11 ... but Month 5, you need another $415.43,
MONTH 5
$897.11 – $415.43 = $481.68
Sell it all for $646.60, and you are up to $1,128.28
MONTH 6
$1,128.28 – $415.43 =$712.85
Sell it all and you are now at $1,359.45.
IF YOU QUIT NOW, AFTER 6 MONTHS OF HARD WORK YOU’LL HAVE MADE
THE EQUIVALENT OF $226.58 A MONTH, OR $52.29 A WEEK.
750pv orders, for 50% discount
SO, you say, that is silly, the smartest way is to do the 750pv order (rather than only aiming for 300 pv), and get your 50% off? OK, let’s do it that way.
MONTH 1
Senegence Sign up — $66.25
750 pv order (33 colors, 33 glosses for sake of simplicity, and purchasing SG best sellers) with tax and shipping — $1,003.95
(S&H is 22.50 and 6% sales tax is $90.45)
You are $1,070.20 in debt, right off the bat. Now you have to sell a color and a gloss, at FULL RETAIL PRICE, every day this month plus tax. If you do that, you will have $1,574.10.
$1,574.10 in sales minus the $1070.20 investment = $503.90 for that month for your profit.
If you bought packaging, mailers, business cards, color holder displays, you need to subtract that amount from the $503.90.
How many hours did you spend selling a color and gloss every day? Probably at least 30 hours that month, if not more.
But that’s not even your money, because you have to do it again Month 2!
So hopefully, you’ve sold ALL of that and paid your credit card off, otherwise, remember to deduct the $30 a month interest from your CC balance as well.
MONTH 2:
Put the $503.90 towards your 2nd 750 pv order. That means $500.05 in debt now ($1,003.95 – $503.90).
NOW all your customers from last month, do they need another color and gloss? Maybe, but probably not. At least they don’t need a second gloss right now. Better find 33 new customers! Where are you getting them from? You’ve probably exhausted your warm market (friends and family)
