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Did you notice? We have a new theme here at the DHFW site! In looking around for free Wordpress themes, I encountered lots of sites touting their top lists of WordPress themes. I would have expected a lot of overlap between these sites, but I was surprised -- there are more themes than sites talking about them.[...]
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Following up on the last post where we identified the target market by identifying pricing and market size most appropriate for Bought Products, things get better when we observe the power of monthly revenue.
Ways to Make $5M a year - Take 1
| # of Products Sold | Price Per-Product | Monthly Revenue | Consumables (3x per year) |
|---|---|---|---|
| 1 | $5,000,000 | $416,667 | $1,666,667 |
| 5 | $1,000,000 | $83,333 | $333,333 |
| 10 | $500,000 | $41,667 | $166,667 |
| 50 | $100,000 | $8,333 | $33,333 |
| 100 | $50,000 | $4,167 | $16,667 |
| 500 | $10,000 | $833 | $3,333 |
| 1000 | $5,000 | $417 | $1,667 |
| 5000 | $1,000 | $83 | $333 |
| 10000 | $500 | $42 | $167 |
| 50000 | $100 | $8.33 | $33 |
| 100000 | $50 | $4.17 | $17 |
| 500000 | $10 | $1 | $3.33 |
| 1000000 | $5 | $0.42 | $1.67 |
| 5000000 | $1 | $0.08 | N/A |
But, let’s take another twist. Let’s keep the price constant and instead think of how the numbers of customers change when we move to monthly, or any repeated sale per year.
Ways to make $5M a Year - Take 2
| $ per sale | # of Customers | Monthly Customers | # of customers (3 sales/yr) |
|---|---|---|---|
| $1 | 5,000,000 | 416,667 | 1,666,667 |
| $5 | 1,000,000 | 83,333 | 333,333 |
| $10 | 500,000 | 41,667 | 166,667 |
| $50 | 100,000 | 8,333 | 33,333 |
| $100 | 50,000 | 4,167 | 16,667 |
| $500 | 10,000 | 833 | 3,333 |
| $1,000 | 5,000 | 417 | 1,667 |
| $5,000 | 1,000 | 83 | 333 |
| $10,000 | 500 | 42 | 167 |
| $50,000 | 100 | 8 | 33 |
| $100,000 | 50 | 4 | 17 |
| $500,000 | 10 | 1 | 3 |
| $1,000,000 | 5 | N/A | 2 |
| $5,000,000 | 1 | N/A | N/A |
What makes this interesting is that consumable products… that is, products that provide only a short term value that then need to be replenished have excellent prospects.
To make $5M in revenue, all one needs to do, for example:
- Find 10,000 customers and sell them something for $500 once,or…
- Find 100,000 customers and sell them something for $50 once, or …
- Find 100,000 customers and sell them something $17 three times in a year, or…
- Find 8,333 customers and sell them something for $50 a month, or…
- Find 20,000 customers and sell them something for $21 a month, or..
You can see how that goes. Play with the numbers and use them to help determine whether your bought product strategy makes sense. Next step: figure out what product to sell, whether it’s a consumable or a one-time sale, or a monthly recurring revenue source. Personally, I like the 10,000 customers $500 a pop or 20,000 customers $21 a month plan… Hmm.
