Even if you are not an avid TV viewer, you’ve probably heard about infomercials. Or perhaps at some point, you have may have actually seen these half-hour advertisements but don’t really give too much attention into it. Whichever the case, you still can’t deny the convincing power of these fascinating promo segments in marketing a product to television viewers.
But regardless of how cheap these TV ads (and its products) may appear, infomercial is big business. And if you’re interested to know more, then we invite you to continue reading as we are going to reveal some mind-blowing facts about infomercial production companies in today’s article.
Let’s dive in…
Not Really Focused On Persuading People To “Buy Immediately”
In reality, the main goal of infomercials is not to entice people in buying advertised products immediately, but rather to test these products and develop a market in retail stores. In short, they are merely introducing these products on TV so they’ll be eventually displayed on store shelves. This where the real money comes from. And the immediate sales from the actual airing of the infomercial are just a bonus.
Incredible Price Markup
The pricing for most infomercial products is $19.99 (for one-time payment). Yes, they may go as low as $10.99, but this is the standard that is usually followed by most infomercial production companies.
To a consumer standpoint, the $19.99v price tag seems very affordable and cheap. But the fact of the matter is, the manufacturing cost of these products is at least $4, making it a 400% markup for every product sold. And that’s the reason why the infomercial industry is considered as a multi-million dollar industry in the United States since the 1980s.
Initially Unconvinced But End Up Earning More
George Foreman may be a Hall of Fame boxer, but his name is also associated in the infomercial because of the famous George Foreman Grill. According to reports, he was initially apathetic in endorsing this product since he did actually invent these grills. Yet, he ended up amassing a total of $200 million in royalties, which is more than the earnings he collected in his boxing career ($17.5 million).
Infomercials are so effective at persuading customers to buy a particular product or service. But the marketability of the product gets even better when it’s endorsed by a celebrity by up 20%, making it a potent medium for businesses that are looking to have huge and immediate response rates.
That’s why a lot of businesses are dying to grab a slot to boost their market sales.
No Meager Cost In Production
And for the last entry on this list of mind-blowing facts about infomercial production companies, a single infomercial may appear to be made with a low-budget. But it actually cost than what you can imagine as the company will have to spend $15,300 to broadcast and product a 30-minute infomercial. And this amount translates to $153,000 for a 10-series of half an hour infomercials featuring a particular product.