Quote Originally Posted by kiltedsawyer View Post
Did you ever wonder how they sold that stuff at such low prices? I think they made more money selling the addresses, etc. of the people who bought the products, to marketing firms.
Actually, it's all down to price point (usually $19.95) and volume (usually in excess of 100,000 units). On a $19.95 item the breakdown is something like this: 50% to the manufacturer, or roughly $10. From that, deduct the cost of manufacturing the "widget", roughly $2.00. Pull off another buck for fulfillment (getting the goods from the warehouse to the distribution company that gets the goods to the consumer). End of the day the company that employs the pitchman-- Billy Mays, Anthony Sullivan, etc.-- makes about seven bucks on each item sold.

The pitchman produces the commercial and bulk buys the commercial air time (30 seconds on "Grey's Anatomy" is about $30,000, which is why you don't see pitchmen hawking their wares on prime-time, network television). When the dust settles his take is about the same as the "widget" manufacturer, something in the neighborhood of six or seven dollars per unit sold.

A good, direct market campaign, tied to the right product, can earn the manufacturer well into seven figures. Same for the pitchman.

I'd be surprised if the mailing lists weren't sold-- but I doubt the sales of the list do more than than cover even half the cost of shooting the commercial, if that.