It’s an Annual calculator that apparel brands can use to calculate the long-term effect of hiring an agency or not.
It’s also a way to see beyond the daily grind and estimate the effect of improving their true return on their ad efforts, aka profit.
As they say… “Revenue is vanity. Profit is sanity.”
Let’s look at a profitability example from a women’s athleisure brand, Before and After making just a couple of shifts.
Before:
Annual Ad Revenue = $112,000
Annual Adspend = $37,000
Annual Agency Fees = $36,000
Cost of Goods = 20%
Annual Ad Profitability = $16,600
Now, let’s look at annual profit after dropping their agency/contractor fees and improving their overall return on ads from 3x to 5x.
After:
Annual Ad Revenue = $185,000
Annual Adspend = $37,000
Annual Agency Fees = $0
Cost of Goods = 20%
Annual Ad Profitability = $111,000
This is a huge shift in net profit.
Adspend is the exact same. Cost of Goods are the same.
Just by eliminating the agency/contractor fees and moving from 3x to 5x, the net return for the year jumps from $16,600 all the way to $111,000.
We invite you to take a moment to really calculate what your year could look like by making a couple of shifts in your ad strategy.
What would your net profit look like without any agency fees and a higher return on your adspend?
