DRTV – How to Calculate Cost Per Order or CPO

CPO, cost per order, cost per order allowed. These are the key metrics for successful dropshipping. For twenty years I have been educating my clients, potential clients, and members of this great industry. I have been blogging about DRTV and the infomercial business for 4 years now, and the key words usually revolve around the cost of producing or airing an infomercial or direct response television commercial. But make no mistake, you cannot make money or break even or execute any direct marketing strategy without knowing your cost per order allowance. Let’s write a blog or Click here for a glossary of infomercial terms.
Cost Per Order (CPO): The average cost of generating one product order for television media is determined by dividing the broadcast cost of a particular television shopping program by the total number of orders received from it.

Allow ads: Your advertising allowable amount represents how much you can afford to spend per order. Your advertising allowable amount is a dollar amount that determines the maximum media cost you can pay per item sold to generate a legal profit. Also called your per-order allowable cost.

In order to calculate the cost per order, you must be able to track responses and sales by media airing, week, month, etc. DRTV and DR Radio are reliable forms of advertising (unlike brand advertising), And your DRTV media agency must have a media management system that tracks calls, web hits and orders for each airing, airing week and airing month. If done properly, distributors should receive daily data estimating CPO and weekly data with reconciliation reports accurately tracking CPO.

We offer our clients a report called the Allowance Report. When setting up a campaign, we Crunching the numbersnegotiate with the client and determine the advertising allowable value or the allowed cost per order. Our custom reports allow clients to see at a glance all stations, networks and broadcasts that are below the allowable value, as well as all media that are above the allowable value. Savvy and responsive media buyers will cancel all media that is performing below the allowable value and re-order the media that is performing well.

For more information DRTV Media Rates and Launch Strategy – Click Here. Don’t forget to subscribe so you can receive all the latest information about DRTV Media Business.

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