Team Jim Beam?? (MERGED)

[pete55]

Originally Posted by simon5574

i'll have another look on my way past today

How far is the round trip from Melbourne to Stapleton?

[M-Kart]

Originally Posted by pete55

How far is the round trip from Melbourne to Stapleton?

only about 3800 km's round trip melbourne to stapylton! haha

the Blue/white DJR truck is the development series transporter. I had a good look at DJR's main B-Double at sandown this year (after the v8 telecom on the side was switched to accor), and i can tell you it is painted orange & black - NOT a vynal.

[spectator22]

MN or Chalker right? Well both, sort of. It IS happening, so MN are spot on, and the livery will be close to what was in MN. Chalker? Like any team director, hes obviously a bit peeved it got out before they were 100% ready (arent they all), but hasnt said anywhere that its NOT happening. Regardless, great news for DJR who were in trouble otherwise. Cant wait to see the tshirts!

[mayhem]

The TShirts might be where the real money is at!

[simon5574]

Originally Posted by pete55

How far is the round trip from Melbourne to Stapleton?

sorry, will update details, live on gold coast now.

DJR and SBR seem to be on holidays, not much movement at either factories at the moment

[Just Do It!]

Originally Posted by mayhem

The TShirts might be where the real money is at!

You are exactly right there.

Any recognised FMCG brand could enter V8 Supercars and form a 50:50 shareholding in a merchandise company with the team that they sponsor. The profits from their 50% of the merchandise sales will nearly pay for the cost of sponsoring the team.

It's money for jam as V8 Supercars has loyal and passionate fans.

I am happy to discuss it with anyone who wants to talk in more detail

[GTRMagic]

Isnt that what v8superstore.com is attempting to achieve?

[Just Do It!]

Not in the same way that I envision it working.

V8 Superstore is great, but just another ticket clipper.

When LP set up Jack Daniels Racing Merchandise with Jack Daniels, the proceeds of Jack's share will virtually pay for the JDR sponsorship.

V8 Superstore is trying to stop one of the negatives of getting merchandise made in China - copycatting. Oh and to clip the ticket on the way through.

No ownership structure has been revealed, and I assume TEGA arent a shareholder, so the answer would be No

[GTRMagic]

I would imagine that being the "Official V8Supercar Online Portal" would have an equity position in the hands of TEGA/VESA and/or a significant licencing fee on the basis of value/volume of merchandise sold.

The official release is Here

If this explored to the extent the NASCAR model is... there is some serious money to be made in a coordinated program that appears at official V8Supercar meetings, and anything other event short of the opening of an envelope....

As ever, this has been talked about on here for a long time....

[cavvy]

Originally Posted by Just Do It!

When LP set up Jack Daniels Racing Merchandise with Jack Daniels, the proceeds of Jack's share will virtually pay for the JDR sponsorship.

Can you let me in on your basic maths here JDI:

sponsorship value ?
profit from 50% of the net sale price?
no. of T-shirts sold?

Do Jack Daniels (USA) charge for use of the logos, etc /

[GTRMagic]

There are NOT zillions of dollars in the merchandise stream... turnover maybe, costs most definitely, but not likely between the two.

It is expensive running a merchandise program, with trailers, personnel, inventories of merchandise... and worst of all is putting these products thru the Ford or Holden or sponsor's dealer network... who want them as close as possible to cost price.....

Even the online sites will have fun recouping P&H costs even if Joe Public pays $10 for the privilege.

The sexy part for the brand marketers is that you get to see Joe Public and his family dressed in the branded goods.... and the punters are happy to pay for it... but unless someone has tickled the maths recently, the profit from merchandise would struggle to fund a full season's motorsport....

[cavvy]

Originally Posted by GTRMagic

There are NOT zillions of dollars in the merchandise stream... turnover maybe, costs most definitely, but not likely between the two.

... but unless someone has tickled the maths recently, the profit from merchandise would struggle to fund a full season's motorsport....

I cant make up a set a numbers to support your claim either GTR - care to throw up a set of numbers (creatively of course) to support your sweeping claim (albeit understated).

[GTRMagic]

I didnt know we were using the forums to team V8Supercar Merchandise Marketing 101.

Merchandise turnover for a 2 car factory assisted team is somewhere between $3m and $4m in income. Say we talk $3m for the sake of the argument

Gross margin would likely be in the sub 30% range, due to a number of factors:
- trade deals with sponsors and car dealers etc
- end of line clearances at season end
- horrible "sale or return" deals with some agents who wont deal any other way
- demands for giveaways to sponsors, to corporate guests on race weekends etc
- Retail products in shopping centres & hobby shops

Operating costs are not low and would include
- Merchandise sales facility (most teams have a truck/trailer with all the bells and whistles) including a display capability and POS sales system
- Permanent staff in charge of inventory management/sales at the team's facility, and jump aboard the rolling circus to the race meetings
- Design staff to actually get the designs off the sketches and onto the product
- Cost of prototyping some products
- Cost of minimum order buys of some items (like model cars)
- Plastic bags to put the goodies in
- Postage & packing for the mail order business
- A storage location for the merchandise items (they seem to suck up a LOT of space)
- Temporary staff for race weekends... casuals but not free...
- Licence to sell goods... in some instances when the truck appears at events, there is a requirement to rent space from the promoter for a fee...

Without getting into the minutiae of detail... a team (who will remain nameless) who has been turning over ~$3m a season on merchandise for the last few years, has been reporting a maximum net profit before tax of ~5% on this gear....

$3,000,000 x 5% = $150,000.... in the scheme of a $6.75m budget.... its one accident on the track...

[Boxy]

Very interesting numbers there Mr Magic.

I would have thought the profit margin would be higher.

What end of town are we talking here?

[Raglanparade]

Well maybe those numbers are a bit Dynamik

[Sweet Corn]

D.J.R. Westpoint, First Rock , Jim Beam Racing Whatever they are called they are a class act that have given a lot to Australian Motorsport .
Dick Johnson is one of the few remaining legends still active in day to day motor racing and is not afraid to put his money where his heart is .
We should all get behind theD.J.R.team and be thankful that Dick still wants to go racing and not hang up the helmet and go fishing.
Dick Johnson you are a true hero of Australian sprting history.

[lowdown]

GTR, are you saying top teams only turn over 3-4 mill a year? There was talk a few years ago that HRT turned over 20 mill in merchandise. These days they sell everything from doors to g strings. I was told by a merchandise manager for a team that one team reported a $250k day of merchandise on the Saturday at Willowbank 06. Thats in one day. I know one thing, i wouldn't mind 5% of 20 mill. I think your numbers are way out. When teams have sales they are normally heavily discounted. ie T8 were selling $90 jeans at 2 for $20. $50 shirts for $10. SBR do the same each year (not this year) and i have been told they still make money because they are items that would other wise be writen off. (Big sizes, old sponsors).

[GTRMagic]

How do you make money by selling something you would normally write off??

If something costs $50 and you sell it for $20, you still lose $30.... Cashflow is NOT profit after all.

HRT is a different case entirely, with the Holden mafia network doing its bit for profits.

The $3m is based on a team that has been a consistent winner in the series not so long ago...

[Lowndesfan6]

I think Ross Stone said on the show on Bigpond, that his Merchandise is about a 1 million business.

[bazil]

Originally Posted by GTRMagic

How do you make money by selling something you would normally write off??

If something costs $50 and you sell it for $20, you still lose $30.... Cashflow is NOT profit after all.

HRT is a different case entirely, with the Holden mafia network doing its bit for profits.

The $3m is based on a team that has been a consistent winner in the series not so long ago...

GTR,

Even if you were lucky enough to turn over 4 million per year in merch sales you would be extatic with a 25% nett profit. This means 1 million dollars that could go back into a team.

Yes HRT have been conected to trading figures of 20 mil + but you have to rememeber this includes all their retail outlets around the country as well. Merchandise is simple, win and you sell. If you dont it is just a branding exercise and nothing else. 888, Stones, HRT-HSV, and more recently FPR and Perkins (because of JD brand not winning) are the only traders turning decent numbers and I will bet only 3 of those are trading better than 4 million a year.

Dick needs 4 large in real money so he had better sell 15 million + in t-shirts...

[GTRMagic]

Originally Posted by Raglanparade

Well maybe those numbers are a bit Dynamik

They never had any merchandising presence of scale... and they havent won a main series race as yet either....

This would be top end of town on results, not necessarily team budget...

[Just Do It!]

Originally Posted by Lowndesfan6

I think Ross Stone said on the show on Bigpond, that his Merchandise is about a 1 million business.

Depends how that is calculated and whether it is turnover or profit.

I suspect the GTRMagic budget is SBR-based as that $6.75 million pops up "magically"....!

If HRT can achieve $1 million in mechandise sales at Pukekohe, and do that by midday on Saturday, you would have to say that Pukekohe is a $2 MILLION turnover weekend for them.

The merchandise manager I spoke to said that you are looking at over 100% mark-up, and a profit is turned on trade sales too. For example, a $90 item at said race track stall also sells for the same $90 ticket at the local car dealer. The local car dealer wants to make 100%, so he buys the item for $45 and makes $45 when he sells it. At $45, merchandise manager is still making money for the team.....although details were somewhat hazey, but strong hints were gifted at around the 30-50% mark-up on cost price to wholesale.

When a team discounts its end-of-season merchandise at 50% off, they still make money - just like a clothing store does during a sale.

And so they should!!

[TSR]

Getting back to the topic of the thread, does anyone know when DJR will annouce the Jim Beam deal and release the war paint for 07, or will it happen at the supertaxi launch.

[GTRMagic]

Originally Posted by Just Do It!

Depends how that is calculated and whether it is turnover or profit.

I suspect the GTRMagic budget is SBR-based as that $6.75 million pops up "magically"....!

If HRT can achieve $1 million in mechandise sales at Pukekohe, and do that by midday on Saturday, you would have to say that Pukekohe is a $2 MILLION turnover weekend for them.

The merchandise manager I spoke to said that you are looking at over 100% mark-up, and a profit is turned on trade sales too. For example, a $90 item at said race track stall also sells for the same $90 ticket at the local car dealer. The local car dealer wants to make 100%, so he buys the item for $45 and makes $45 when he sells it. At $45, merchandise manager is still making money for the team.....although details were somewhat hazey, but strong hints were gifted at around the 30-50% mark-up on cost price to wholesale.

When a team discounts its end-of-season merchandise at 50% off, they still make money - just like a clothing store does during a sale.

And so they should!!

A 30% markup is typical of clothing, not necessarily team merchandise however... and is a contribution of around 23%... unless you are selling these things for cash, by the shedload, and with very little involvement from the seller... the dollars just arent there.

Meantime, if Pukekohe is $1m in turnover by lunchtime Saturday, if you assume that this is 12 hours of work, being all of Friday plus the 1/2 of Saturday.... it equates to:
~$83,333 in sales per hour
~$1,389 in sales per minute
~$23.14 in sales per second

If you presume there are 4 POS outlets... it then becomes
~$20,833 in sales per hour
~$347 in sales per minute
~$5.78 in sales per second

Seems over inflated to me....

Sometimes talking big numbers somehow dont relate to the cash in the bank. Like saying 800k is nearly a million, and building from that....

[Sequel]

Where are you getting your 30% mark up on clothing? Fashion clothing works on a minimum of 100%.

Mass produced merchandise (where a screen printed t-shirt will cost you less that $3 (including the t-shirt) and sells for $25-$35 dollars... that is alot more than 30%. The manufacturer sells them for $3 to the merchandising company, merchandiser sells them to the teams for say $10 (gets his 300%), team wholesales them for $15 (50% markup) for shirts that retail for $30, so the re-seller gets their 100%, and the team sells them at the track for $30, making 200% for the team. Just like drugs, there is alot of money to be made for everyone in the chain! (apart from the consumer)