Agckphbft. I didn't expect so many of you to order the DVD of the movie we made here, Aardvark'd: 12 Weeks with Geeks. I thought we'd get about 1000 orders. So far, we've received about 2600 orders, which went to 55 different countries, including Kazakhstan. We even sent a copy to someone in New Orleans.
Now, anyone in their right mind would have found a fulfillment house to actually package and ship these damn things, but here at Fog Creek we seem to have developed a do-it-yourself kind of culture. That led to a three day packing and shipping ordeal to get the first batch out the door, which is finally over.
The way I justify this silly exercise in hard labor is that I can write it off as a learning experience! Here's what I learned:
So far we've shipped to just about everyone who ordered, except for the last 100 people who ordered the NTSC edition, because we flat ran out. More NTSC DVDs will arrive on December 14th and will go out quickly. We still have some PAL in stock, so those are now going out the same day.
In case you're wondering how much it really costs to produce a movie like this, here's the approximate breakdown.
Incremental Expenses (per unit)
$2.00 - DVD production and delivery
$5.00 - Royalty to filmmaker
$0.30 - Envelope for shipping
$2.52 - Postage (weighted average)
$0.20 - Other supplies for shipping (labels, paper for packing slips, toner, boxes, etc)
$1.00 - Shipping labor (estimate, since most labor came from Fog Creek employees on the payroll anyway).
Total per unit: $11.02. Since we're selling at $19.95 that's $8.93 gross profit.
$5,000 - Stipend paid to Boondoggle Films
$5,000 - expense reimbursement to Boondoggle Films
$925 - English-language subtitles
$3000 - Terabyte storage server used to hold footage while editing
$1000 - Graphic design of DVD cover and silkscreen
$200 - Damaged goods, accidental double shipments (due to lack of bar codes!), spoiled postage, etc.
Total: $15125. So we need to sell 1694 copies to break even. As of today, we've sold 2595, so we made a profit on the movie of about $8048.
There's one thing this doesn't account for: since we buy the DVDs in lots of 1000, at some point in the future we're going to have a bunch of DVDs that we just can't sell and we'll have to write those off. With 2 SKUs and batches of 1000 we'll waste an expected 500 units per SKU which is $2000, so deduct $2000 from the profit giving you a final figure of $6048.
Not bad! I was hoping to break even on the movie, and make a "profit" through more applications to our summer internship program from people who saw the movie and were inspired to work for Fog Creek.
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