Why Does My Bank Balance Never Match My Webinar Sales Income?

By John R. Aberle | Business Systems

Mar 22
Graph of Sales, Cost of Sales, Expenses (Overhead) and Profits

You’ve invested all that effort to host your webinar or virtual summit. Your results were wonderfully successful. Yet after all the bills came in, your bank account does not reflect the great numbers you were looking at from the sales figures. What happened? After all, this was a virtual event. You had none of the expenses associated with a physical seminar or physically printing a book. Where did your money go and why wasn’t it as profitable as you expected?

Graph of Sales, Cost of Sales, Expenses (Overhead) and Profits

Having done over 100 onsite profit and expense control consulting jobs to small business throughout the United States and Western Canada, I found that brick and mortar small business owners often overlook their overhead when doing job pricing and planning. When you jump to entrepreneurs, solopreneurs, and coaches, the problem is evident there too. The impact of ignoring or not being aware of your overhead is that you will make poor, if not outright bad, decisions.

“Opportunity Cost”

While probably every solopreneur and entrepreneur believes that he can do everything himself, there is a cost to do-it-yourself. In business management circles, this is called “Opportunity Cost.” Basically, it comes down to what are you failing to do that could generate more money while you dabble in lower valued tasks that you could hire done for less than what you could generate with that time?

For instance, writers can be developing their next book while the accountant can handle their books. Small business owners can negotiate strategic marketing alliances while VAs (virtual assistants) can do all the typing and uploading content and images to the website.

Examples of Costs and Expenses Often Overlooked

  • Cost of Sales (Payouts and Fees)
    • Affiliate network fees
    • Commissions (usually 50% of the sale though this is flexible)
    • Tier 2 affiliate commissions (generally 10% to 15% depending on how much you want this affiliate to bring his network of affiliates)
    • Advertising
    • Press releases services fees
    • PayPal fees (2.9% + $0.30 per sale) or credit card processing fees based on the sale amount
  • Cost of Sales – Services for This Specific Event
    • Virtual assistant help
      • Doing transcriptions for the sessions of this event
      • Managing your audience questions, etc.
      • Submitting press releases
      • Uploading email copy for affiliates to use
      • Proofing and typing your notes for slides, handouts, and bonuses
    • Purchase of PLR (private label rights) for bonuses you want to give with this event
  • Overhead Costs – Ongoing Services
    • Webinar hosting fees (e.g. Go-to-Webinar)
    • Email hosting fees
    • Website hosting fees
    • Domain name(s) registration
    • PayPal or credit card processing base monthly fee
    • Themes and plugins, if you are using paid themes and plugins like
      • Thrive Themes
      • Thrive Content Builder
      • Visual Composer
    • Overhead Costs – Various Assistants’ Services
      • Virtual assistant help
        • Developing a list of potential speakers and potential JV (joint venture) partners
        • Posting social media posts
        • Doing transcriptions in general
        • Doing the posting of your blog posts (even though you wrote them)
        • Putting your Google Analytics information into a report for you
      • Accountant help
      • Technical assistance to process recordings
      • Graphic designer fees
        • Banner ads or graphics for affiliates to use
        • Creating memes to publicize your event
        • Covers for your virtual CDs and e-Books
      • Computer technical assistance for maintaining your website’s health
      • Purchase of PLR (private label rights) for bonuses you want to give generally, like for joining your membership site or for purchasing your products
    • Taxes
      • Income tax, federal
      • Income tax, state
      • Self-employed Social Security and Medicare taxes

Cost of Sales vs. Overhead

While the above list is broken out into five categories for your ease of understanding. Technically, there are only two main categories of costs and expenses shown above:

  • Cost of Sales (COS)
  • Expenses or Overhead

While there are a variety of things that fall under overhead, the key difference between these two is whether you can attribute the line item directly to the sale of a specific product or service or, in this case, event. If so, it belongs under the cost of sales. If it tends to run year long regardless of the products and services, it falls under the overhead category. Now one item which I put under COS could be under overhead instead: advertising.

On this example, advertising is under COS because it assumes you will want to ramp up advertising specifically for this major event, i.e. your webinar or virtual summit. If on the other hand, you run advertising constantly merely changing the products and services emphasized, then your advertising belongs under Expenses as an overhead item.

Notice that just Commissions (usually 50% of the sale) and Tier 2 affiliate commissions (10% to 15%) could take up to 65% of the face amount of your sales if you rely on affiliates. Use PayPal and that could be another 2.9%. So just on these figures alone, you might end up with only 31.1% of your sales.

Look to the Bright Side

This is not at all bad. You are making money even though it may not be what you imagined it would be. More importantly, you are getting an email list of customers. People who have bought from you once are vastly more likely to buy from you again. Depending on your agreement, the next sale may have a smaller affiliate commission than the first one which means you make more money on the subsequent sales.

The key thing here is for you to be conscious of the costs and expenses (overhead) when planning your webinar or virtual summit so that you are realistic about how much you will net. Awareness of your cost of sales and your expenses enables you to manage so as to make a profit and not overspend. Remember, earning some profit far exceeds trying to cut corners and making none.  “100% of nothing is nothing.”

Open your heart in selling,
John's digital signature written with mouse
John R. Aberle

P.S. To receive information regularly on how to develop and apply strategy to your small business, get your free e-Course, “9 Steps to Finding Prospects Who Want What You Providenow.

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About the Author

I have a strong love for small businesses, especially brick and mortar companies. After an 18-year career in sales and marketing, I started my own service company, which I grew in both sales and profits for the first five years. In my sixth year, the bottom dropped out of the printer market such that it made more sense to sell my assets and return to Southern California. There I went to work for an international small business consulting company. I spent over three years on the road with them helping small businesses to become more profitable and better managed. I then started my own company specializing in sales and marketing consulting, coaching and training. My emphasis is on heart-centered, relationship selling that empowers prospects to make their own choices.