4 ms·
My guess is that the profit margins are so high, and the marketing is so cheap, you don't need a ton of sales to make money.
by chinchilla2020 2y ago
My guess is that the profit margins are so high, and the marketing is so cheap, you don't need a ton of sales to make money.
- whstl 2y agoAnecdotal, but: I know some music equipment influencers and most of the ones I know just receive a free product, so yep it is very cheap. There are exceptions of course. My sister know some perfume influencers (who knew it existed) and it's very similar.
- TylerE 2y agoIs it really "just a free product" when that stuff starts around a few hundred bucks and can easily run into the thousands?
- whstl 2y agoWell, it is by definition, but yeah: with expensive products they obviously only send units to a small number of influencers, and often I know some stories of people only having it for a few days for making a video and having to return, almost as a favour. The more professional influencers obviously get paid a rate, and might or might not get a free unit.
- giantrobot 2y agoMost of that stuff has embarrassing margins. Sending a couple samples to an "influencer" (paid advertiser) is the same as sending a retail shop floor samples/demo units. It's a tiny fraction of an advertising budget to get it in the influencer's hands then in front of potential customers. An influencer campaign is probably a fraction of the cost of TV commercials with an order of magnitude better attach rate.
- TylerE 2y agoI think y'all are missing the further implications. A lot of these influencers talk up the gear they're sent for free and then sell it.
- giantrobot 2y agoA lot of gear sent to influencers is on a trial basis unless it's a "we want you to be seen using it". They usually have to return stuff after they make their ad. There's a subset that are directly selling stuff either as drop shippers or affiliate marketing. They're video versions of SEO blogs. I'd put those in a different class than the ones just running ads on their existing content channels. While they might be called "influencers" they're just running ads for their sales hustle.
- whstl 2y agoThis is not big enough to put a dent in sales. If the product is sold by an influencer, it will be sold as "Used", long after the "hype period" is over. This initial period of booming sales is very important for products announced trough influencers. Paying for the influences to do the work is more expensive than the products themselves, in pretty much every case I know of. And even for expensive products: if you send something to an influencer with the expectation to get back, it will come back used and has to be sold as B-Stock for a loss anyway. For stuff up to $200, $300 it ends up being much cheaper to just give away.
- jcranmer 2y agoIndependent of the actual unit cost, if delivering one unit free of charge to an influencer results in just two extra sales, the manufacturer has made a profit on the free sample.
- chihuahua 2y agoThat is true only if the profit margin is > 50%. It is independent of unit cost, but not independent of profit margin.
- mrguyorama 2y agoMost influencers literally don't even know their own worth, and don't really know how to negotiate, and have weird feelings about monetizing what is often a creative endeavor in general. So most brands actually get a HUUUUUGE discount from influencer advertising, because it is explicitly more effective than most modern forms of advertising and you can get your product or service in front of half a million people for low 5 figures. You don't have to do anything, the influencer will take care of shooting and editing and all the hard work. Also, nearly everything shilled through influencers is extremely cheap garbage, with significant profit margins that they just pump into more advertising, like raycons or other practically whitelabeled products