Find out at SpyFu.com. Here are the results for Knoxville’s own Jewelry TV.
That ad spend estimate is pretty broad. In my experience and in talking to other people the real number is likely to be at the lower end of that range, assuming the company hasn’t recently changed their ads or bids. Still, $5K a day is nothing to sneeze at, and neither is 14,000 clickthroughs per day. Those guys are definitely slangin’ some jewelry.
Those figures put their average cost per click at 35 cents. If their conversion rate is the mythical 1% that would put their marketing cost per sale at $35.00. To be profitable one or more of the following would need to be true:
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The typical sale is something more expensive than the $40 loss leaders.
Their conversion rate is better than the 1% rule of thumb.
Their product margins are more than I think they are. (I know the IT business, not the jewelry business.)
If they effectively market to existing customers they can generate repeat business, reducing their cost per conversion.
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Their margins are MUCH higher. In the jewelry biz they can sell it to you at 50% off and still make a 50% margin…
Yeah, retail jewelry is pretty much a scam.
I figured the margins are higher than I think they are, but they’re probably still higher than I think they are. Sort of like the law that says everything takes twice as long as you think it will, even if you expect it to take twice as long as you think it will.
Had an uncle in the wholesale jewelry biz. He got me an engagement ring for $700 which appraised at $2100. I thanked him for the great deal on the ring. He replied, “I gave you the same price I’d give any customer. Never buy retail!”