Short conversational excerpt from a YouTube video by Eric Deeran - Master Filmmaker. Two speakers discuss revisiting client contracts and aiming for an 80% gross profit margin on packages: speakers recommend that labor/fulfillment should be about 20% of the contract, ads might take 10–15%, and sales commission about 10%—all used to justify the 80% gross target.
Actually sitting down tomorrow to start conceptualizing all these new retainers and all these new ideas. And because it's kind of interesting, all of my clients have come to come to a point where things are shifting and we're kind of revisiting contracts and that kind of stuff, which I think is good. I'm not. I'm trying to do my best to incorporate sort of like the mindsets and those kinds of shifts that were.
And then on a more tangible level, 80% growth gross profit on your packages is what you want to shoot for. So after labor, labor being the 20%, you want to shoot for 80% gross, minimum. Because when you start to. Yeah, yes, exactly. So, like, I know your eyes are getting big.
You're like, oh, that's just mind blowing to me.
Well, because think about it. When you have cost per acquisition, if you run ads, ads might take up 10 to 15%. On top of that, you might have a salesperson that you pay 10% commission to close the deal for you. Right. But to fulfill on it should take 20% of the contract.
That's it.
