The following will attempt to break down how the money generated from the sales is divided. This varies from Company to Company or group to group. What we will attempt to do is give you a general break down that should be close. The following is based on teens that receive Financial Aid or compensation from their participation.
Some non-profit organizations may give prizes or other items of value in exchange of cash. Not knowing the value or the cost of the prizes given for the sales quotas, we can not compare these to the teens that are given actual money.
Generally, the teens receive about 33% from each sale. This is their money to spend for their personal needs. This includes crew bonuses and incentives such as admission to amusement parks, weekend outings, free dinners or just cash bonuses.
The percentage of compensation for the teens pay depends on the person in charge of the group. It may be 30% with another 5% going to bonuses and activities. They must have some kind of incentive program in place to keep teens interested, motivated, and having fun while making much needed money.
One must remember that in this day of age teens are not stupid and are not going to work if they do not make any money. Pure and simple no money no work so the person in charge has to keep the incentives and the pay good to keep the teens interested and to keep them motivated. This too is why they have so many activities for the teens.
Teens work for at least one of two reason these being either the teen needs to earn money or the teen has a lot of fun selling door to door, most work for both reasons. If one of these equations, the money or the fun is taken away then a teen will not participate. The job has to be rewarding and fun.
The supervisor working with the teens usually works on about 33% of the receipts.
The supervisor must work on 33% as they have a lot of overhead coming out of their money. Lets talk about what they have in cost to make the income program work.
A supervisor will usually spend a minimum of $70.00 a day on gasoline as they must pick up the teens at their homes and take them to a work area. Then they must stay with the teens and drive around constantly making sure the teens are not running out of area to work and making sure they have adequate varieties of products to sell.
They too are making sure things are going well and making sure the teens are safe, the vehicle never stops moving as they are supervising the group constantly. Thus using a lot of fuel and putting a lot of wear and tear on their vehicle.
On Saturdays, they usually go a little bit farther to a work area. This is done because the areas close to the teens home has been canvassed on a regular basis. They do not have driving time on school nights to go too far and still be home early as the teens have school the next day. So on Saturdays they may go a little farther, their gasoline cost on any given Saturday can run over $80.00. It is nothing for a supervisor to spend $350.00 a week on gas alone.
When a supervisor picks up the group they never know for sure how many teens actually work that day, even though a teen may be signed up for work, things may come up, perhaps the teen has a lot of home work or gets home late from school. The supervisor picks up whatever teens want to work that day.
They may have eight teens working or may just have three, never the less the cost of operating the vehicle does not change very much, some days a supervisor will do well and other days they may lose money.
In most cases, the supervisors are also responsible for the payment and maintenance of their vehicles. The vehicles are constantly being maintained as they put many miles on them. The payments on the vehicle can be high, as passenger vans are not cheap. A late model van can cost as much as $500.00 a month and another $200.00 for insurance. A new van can as much as $25,000.00 with payments of six to seven hundred dollars a month plus insurance. This money too is generated from the 33% the supervisor receives from the sales.
The supervisor must pay for his or her own maintenance such as tires, brakes, a lot of oil changes etc. With the high miles a supervisor puts on a vehicle they should change vans a minimum of every three to four years.
Most supervisors consider a van as their office on wheels and consider the cost of the vehicle as the cost of doing business "OVERHEAD". It generally cost over $500.00 a week to pay all the overhead for the sales program.
In many cases, the supervisor also has the cost of buying permits and paying taxes to the cities that the teens sell. Some are reasonable and some are expensive. Most supervisors carry cell telephones so that the teens and parents can be in contact with them at any given time.
Whatever money left over from the cost of maintaining the vehicle and overhead is the income for the supervisor to support his or her family.
The supervisor devotes all their time to working with teens and providing the income program and must earn compensation for such. Such as anyone else working a full time job would do. "Be sure and look at job comparisons" on our site.
In many cases, the supervisor buys products from a wholesaler that carries different kinds of product needed for the sales program.
The wholesaler will offer products that will fit into the supervisors price range (percentage of cost) as any wholesaler his mark up will be approximately 20% to 25% above the manufacturing cost of the product.
Out of the wholesalers, mark up he too must pay overhead such as space rent, gas and lights as well as any employees and everyday cost to help run his wholesale business.
Lets look at a hypothetical situation showing the mark up on products sold at retail for $6.00 and show how the money is generally broken down.
Teen compensation including incentives and bonuses 35%
Overhead, vehicle, literature printing etc. 15% to 20%
Supervisor profit 12 to 20%
Cost of product 25% to 30%
This calculation varies depending on how much a supervisor spends on printing, vehicle, vehicle maintenance and fuel. The cost of product can affect the percentages as well but generally, the teens will always receive 30% to 35% of the retail price. This would include bonuses and incentives.
The same calculation may be used for other retail sales prices such as $5.00 and $7.00.
We are providing this break down as we have sometimes have seen people that give a distorted break down. They try to imply that everyone is making clear profit (as if everything is free for them) and as if no one has any overhead or operating costs. We sometimes laugh when someone tries to make a statement like this as we know there must be some kind of hidden agenda involved.
We hope that this has helped you to understand what happens to the money spent when purchasing a product from a teen.