DRTV can promote and sell a product for a fraction of the traditional cost. But exactly what kind of profits are possible? And how much capital do you need? This calculator should give you an idea.   Click here to download an Excel spreadsheet of the Calculator which you can use interactively. You just fill your values in the four blue-tinted cells in the Net Profit Per Unit section and this interactive spreadsheet will update automatically. For more precision, adjust any of the other cost figures to fit your product. For important details on various line items, be sure to see Financial Facts.     Below, you'll see a non-interactive example.

DRTV Income & Cash Flow Calculator
				Fill in the blue cells below & the rest will re-figure itself.
	6-Month Summary			Net Profit Per Unit				% Sales
	$600,000	Media $		Advertised unit price			$49.95
	$1,500,000	Sales		Add shipping & handling			$7.95
	2.5	Ratio		$ per sale			$57.90	100%
	$200,311	Profit		Less costs:
	$305,000	Investment		Maximum media cost allowed			$23.16	40%
	66%	ROI		Cost of goods sold (inc.bonus)			$11.50	20%
	1-Month Summary			Credit card merchant account			$1.45	2.5%
	$25,000	Media $		Cost of ship/handle/fulfillment			$3.00	5%
	$62,500	Sales		800 number service			$3.00	5%
	2.5	Ratio		Returns & bad debt			$2.90	5%
	(1,057)	Profit		Royalties		3.0%	$1.50	3%
	$45,000	Investment		Overhead, tapes, etc.			$2.90	5%
	-2%	ROI		Net Profit			$8.50	15%
	Looking at 6 Months...
		Month 1	Month 2	Month 3	Month 4	Month 5	Month 6	6 Mo Total
	Media budget	25,000	50,000	75,000	100,000	150,000	200,000	600,000
	Units sold	1,079	2,159	3,238	4,318	6,477	8,636	25,907
	Gross income	62,500	125,000	187,500	250,000	375,000	500,000	1,500,000
	Cost of goods	12,414	24,827	37,241	49,655	74,482	99,309	297,927
	Other unit costs	15,907	31,813	47,720	63,627	95,440	127,254	381,762
	Changes to TV spot	10,000	0	0	10,000	0	0	20,000
	Total costs	63,320	106,641	159,961	223,282	319,922	426,563	1,299,689
	Net Profit	(820)	18,359	27,539	26,718	55,078	73,437	$200,311
	Working capital needed	65,000	110,000	160,000	225,000	320,000	430,000
	Starting cash	0	64,180	132,539	190,078	251,796	376,874
	Investments In	65,000	50,000	30,000	35,000	70,000	55,000	$305,000
	Income in	62,500	125,000	187,500	250,000	375,000	500,000
	Less all costs paid out	63,320	106,641	159,961	223,282	319,922	426,563
	Ending cash	64,180	132,539	190,078	251,796	376,874	505,311
	Looking at Month #1…
		Week 1	Week 2	Week 3	Week 4	Week 5	Total Mo
	Media budget	5,000	0	5,000	0	15,000	25,000
	Units sold	216	0	216	0	648	1,079
	Units manufactured	1,100	0	0	0	0	1,100
	Units on hand	884	884	668	668	21	21
	Gross income	12,500	0	12,500	0	37,500	62,500
	Cost of goods	12,650	0	0	0	0	12,650
	Other unit costs	3,181	0	3,181	0	9,544	15,907
	Changes to TV spot	0	5,000	0	5,000	0	10,000
	Total costs	20,831	5,000	8,181	5,000	24,544	63,557
	Net Profit	(8,331)	(5,000)	4,319	(5,000)	12,956	(1,057)
	Working capital needed	34,013	0	29,544	0	0	63,557
	Starting cash	0	26,669	21,669	35,987	30,987
	Investments In	35,000	0	10,000	0	0	45,000
	Income in	12,500	0	12,500	0	37,500	62,500
	Less all costs paid out	20,831	5,000	8,181	5,000	24,544	63,557
	Ending cash	26,669	21,669	35,987	30,987	43,943
	Note:
	This is a ballpark estimate only.  Your actual sales & costs may be very different.
	Costs of initial TV production & tapes are usually amortized over lifetime and not included here.
	For simplicity, upsells and backend sales, which can add significantly to profits, have not been included.
	New merchant accounts may face substantial holdbacks.
	For more details, see Financial Facts at:
	McNamara & Associates     mcdrtv.com   818-907-6212							Rev. 12/9/02