How Much Does a Product Launch Cost ?

Product Launch Costs

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Launching a new productcan be stressful if you have nor developed a clear marketing strategy with measurable goals. You may think that your project is almost

complete having worked 24/7 to create the best product or service you can.


In reality the work you have done represents only 20% of the job you have taken on. It may be the best but if no-one gets to hear about it then you have wasted your time.


There are 1000s of brilliant books that deserve to be best sellers but aren’t because they never received the marketing they deserve


Just releasing your phenomenal concept into the wild and lavishing time on your Facebook page and other social networks may get you some traction but it won’t be the big bang you were expecting.


What will is a carefully planned product launch which is laser targeted on your core audience.


That leaves you with three questions…

#1. How much does a product launch cost
#2. What long term added value will doing a launch bring to my business?
#3. Should you hire a product launch manager?


We’re going to focus on the first question today but I will be covering two and three in future posts so lets drill down and look at what should be in your product launch budget.


Here’s what to include in your ‘cost of doing business’


a) Merchant Fees – Allowing 3% should easily cover the cost of your merchant account and doing business with PayPal. Remember the more ways of paying that you offer your prospects the better.


b) Affiliate Commission or List Acquisition – With an existing prospect list of your own, the affiliate commission would work out at about 40% assuming that you are promoting to your list and offering an affiliate commission of 50%. If you don’t have a list, start building one quick. The fastest way is to buy carefully targeted lists. Allow 3.5% of your projected gross sales for this. But be very careful about the lists, you select. An old tired list that has been thrashed will not be responsive. On the minus side, buying in lists Adds to your costs before your product launch but will transform your potential ROI because you won’t have to work with affiliates or jv partners


c) Product Cost – Allow 5%. This may not cover your time and expertise fully but it should cover your research costs, development and other costs involved.


d) Server Cost – Allow 0.5%. Remember that if you are on a shared server and you exceed your allowed band width your product launch could be shut down because it is too successful. Better to be safe than sorry by using  Kajabi whose servers are in the cloud. Even their least expensive account offers unlimited bandwidth


e) Returns – Allow 10%. By under promising and over delivering, the number of refunds you have to make will be minimised.


f) Bad Debts – Allow 5%. Offering a multi-pay option means that you may not receive all of the payments due. Having said that, recent testing shows that by offering this choice you could boost your conversion rate by times


g) Misc Costs – Allow 5%. This would cover offering incentives to survey respondents, some PPC advertising to test headlines and some Facebook advertising to get some traction for your business page… Plus unexpected expenses


h) Product Launch MangerAllow 15%. There are a lot of moving parts in a product launch so hiring a launch manager makes sense. He will bring a fresh pair of eyes to your launch strategy and help you to maximise your ROI… Worth every dime


Note: All these percentages should be calculated on your gross sales


Bear in mind that the added value that your first launch will bring to your business in terms of positioning, momentum and new launch ideas will set you up for long term success.


One product launch by itself will be the single biggest leverage point that you will ever encounter so plan on doing a whole series. Doing so will have a stacking effect as each subsequent launch will build on the success of the last


You may be wondering how much hiring a product launch manager will cost and the quick answer is not as much as you might expect. Our aim is to structure a win-win sort of a deal with clients.  We get paid when you get paid. That is we work on a percentage of the ‘pre-return’s gross’ revenue that your product launch makes. Naturally, you have to pay a fee to get on our calendar. We can only take on 2 or 3 clients per year so our time is valuable and we must know what our schedule is well in advance. It would be unfair on our other clients if we didn’t insist on this. Find out more by booking a free consultation with me now


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Rory Ramsden