Managing Costs & Profit for Raffle or Competition Stores
Metorik's costs and profit system has been designed and built for "typical" eCommerce businesses – where the cost of the items sold is "fixed" and not related to how many units were sold.
Example
You sell a pair of shoes for £100, and they cost you £50.
If you sell one pair, your costs are £50. If you sell 10 pairs, your costs are £500, but your cost per item remains £50.
In Metorik, you would set your product cost as £50.
Costs for Raffle or Competition Sites
For Raffle or Competition sites selling prizes such as cash giveaways, technology or cars, costs and profit generally work a little bit differently, where the cost (per item sold) is directly tied to the total number of tickets sold.
Example
You sell tickets to a raffle with a grand prize of £50,000 cash
You sell tickets for £1 each
If you only sold one ticket, your cost would be £50,000
You end up selling 142,800 tickets which means your cost per ticket sold is £0.35
In Metorik, you would set your product cost as £0.35
How to set this up in Metorik
Because you don't know exactly how many tickets you'll sell until the competition ends, you'll need to wait until after the competition ends to calculate the product item cost, and have Metorik calculate your profit and margin.
Step 1 – Calculate the cost per unit sold
Using the example above, once the competition ends, you can divide the total cost (your cost) of the prize (£50,000) by the number of tickets sold (142,800) to get the cost per ticket sold (£0.35).
Step 2 – Update the Product Cost in Metorik
Visit the Product Costs page in Metorik (https://app.metorik.com/costs/products)
Find the product and enter the calculated cost per ticket (£0.35 in the example above)
Step 3 – (Re)calculate your Order Costs
Because Metorik calculates the order cost at the time the order is placed, but for your store the product cost was likely blank, the orders for that product will have the incorrect profit and margin.
No worries though, we have a simple tool you can use to recalculate the costs and profit.
Visit the Cost Tools page here: https://app.metorik.com/costs/tools
Select a date prior to the first ticket from that raffle being sold.
Select to calculate costs for "All Orders"
Uncheck the other options, leaving just "Product Costs"
Click Calculate
Metorik will then go through and update the product cost for each order and work out the new order cost and profit margin for that product and for orders containing that product.
If you get stuck along the way or need a hand with anything in Metorik, we're here to help! Just click the help icon on the bottom right, or email [email protected].