- Written by Skip McNutt
All About “ROI” – Return On Investment!
It’s hard to wrap your brain around this. I have visited with entrepreneurs from across the country. These are people who travel from city to city setting up a booth in trade shows and spending the weekend selling their goods. I find this interesting.
Consider, for a moment the costs involved and the ultimate return on investment (ROI)
These are just basic weekly averages.
Hotels for seven days will average about $100.00 per day. $700.00
Event entrance fees per weekend average. $800.00
Gas to travel from city to city. $200.00
Total expenses. $1,700.00
Average weekend sales volume. $3,000.00
Cost of goods Average 20%. $600.00
Leftover after base expenses. $700.00
This doesn’t even cover the operating cost of a vehicle and trailer required to transport products from event to event.
After all the other expenses you still pay for food when traveling and that can add up quickly.
So, what’s my point?
Those who travel in this type of business are constantly working to make a living. Most of these hard-working individuals are not able to pay the high cost of establishing a permanent location with a brick and mortar businesses. At the end of the day the return on investment is minimal.
In my experience over the years as I have interviewed those who pursue event businesses and the majority of the products and product sources are not scalable. Over 90% say that hey would like to make more money. Most have websites but do very little business online. The challenge with websites has everything to do with understanding how to drive targeted traffic that will convert to sales.
Is it possible to invest in a business that includes ongoing residual income as well as commissions on direct sales and a much higher ROI? ABSOLUTELY!
This is where “Affiliate Marketing” becomes very attractive. Let’s consider the business costs listed above. Everything included, the total monthly cost is approximately $9,200.00 with a balance left over of about $2800.00.
Now let’s look at the possibilities with Affiliate marketing. Most marketers will spend approximately 20 to 30% of their income on marketing etc. It’s not uncommon to receive 5 times your investment in return. That means that a marketing cost of $2000.00 (At 5 times the investment) can be $10,000.00 or more.
I realize that these numbers can and will vary a great deal based on your product and methods of marketing. The point is that Affiliate Marketing opens the door to a very high return on investment. Much higher than most business models. Affiliate marketing means that you are selling someone else’s product without the need to manufacture, stock, or ship the product. You can do business any time, anywhere and with whatever your budget allows.
The end game is to generate the best ROI possible. I don’t know another business that has this kind of potential.
I am not trying to advocate against other forms of business. I know a lot of people in the event business who I consider to be friends and who are willing to work hard for their living. There is nothing wrong with the event lifestyle and the travel that typically comes with it. I am, however, saying that it is possible to generate a much higher return on investment in a business that provides much more freedom of choice.
Things to think about!
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