Re: Off Topic/Miscellaneous Subjects - Discussion

by jlccaz Sat Aug 11, 2012 5:42 pm

There is margin built into the retail price of the model no doubt. Experienced business people well understand that it takes time for a company to become profitable. Personally I don't think people water has a viable business model. But that is a completely separate analysis from whether the two dollar per bottle purchase price has an expected margin of profit built into the price, whether at wholesale or retail.

And in any event, this business chose a cause marketing slogan that relies upon immediate donations being made prior to profitability. That was people waters choice. Frankly the cost of one well is so small compared to gross revenues I don't think it was a particularly aggressive commitment on their part even as a start up.

by dw_a_mom Sat Aug 11, 2012 5:44 pm

northernviewer wrote:Seriously???? $45.00 a case and they give about .20 cents for the well??? OMG what a scam they have going!! and all I got to say is that anybody who'd pay that much has a few People Rocks in their head already. I have never paid more than $5.00 for a case of 24 water, and usually can get it on sale for less than $3.00 No wonder he went on the Bach and advertises for it any chance he gets.

Is this water special?? holy water? can they ask that much for it cause Jef walked on it??

That number is someone's guess, not fact. My guess is 1 - 2 cents, if anyone really wants to know, and I realize that isn't going to make this board feel a whole lot better, but there is a lot that goes into manufacturing and sending out a bottle of water, believe it or not. It is super tough to compete with the big guys who are selling you that case for such a low price; they have advantages a young, independent company does not.

I rarely buy bottled water because of the environmental concerns, but if I were to have a choice between a slightly higher priced product from a small, independent company and a less expensive chain product, I would pick the former, simply because I believe in supporting small business. And if I could feel that the company was committed to doing some good somewhere, I'd like that, too. But I wouldn't be buying water for the purpose of getting wells built in Ghana; if I want that to happen, I'll donate directly to a charity. I'd simply be looking for small ways to offset my guilt at buying such a ridiculous product like bottled water in the first place.

by Guest Sat Aug 11, 2012 5:47 pm

dw_a_mom wrote:
kate123 wrote:

The normal profit margin on bottle water can be from 50 to 200 percent according to industry figures. A 24 pack of People Water purchased on their website is $45.00 without shipping. The bottles are approximately 17 oz. (16.9) which means this water costs 11 cents per ounce. Even if their profit margin is at the low end for bottled water, that means they they're making $22.50 on each case of water sold.

I can see what is known as "gross profit" being that high, but not "profit." Profit is what is left after you've paid all the employees, interest on your debts, rent on the office. Gross profit is what is left after production costs ONLY, and even that equation gets difficult, because I have no idea if what you read uses only direct production costs, or makes an attempt at full absorption accounting. Either way, as someone who looks at business numbers for a living, and has advised numerous start ups, I do not believe in your assumptions. They are not "making" $22.50 on every case of water sold, that is simply impossible. I'd bet my mortgage on it, I am that serious.

This is really the difference in how we all view this discussion. If a company is making solid money, a fraction of a cent per bottle is paltry. But if the company is operating at a loss, and employees like Jef are barely paying themselves, it starts to look pretty darn generous. To me, knowing what I know about young companies, it was a very brave pledge. You can't compare PW to long established companies with a history of profits, because that isn't the situation they are in.

I still agree that consumers have a right to understand how much of their $2 purchase goes to wells, because that would be part of making an informed decision when faced with bottled water choices (or just going to your tap and sending a check to generosity water instead).

I can easily see a profit margin of 50%. A case of Nestle water, same size bottles, same number of bottles costs $7.00. People Water costs $45.00 a case. The only difference between the two is the water inside the bottle and maybe some extra costs for printing the bottle. You can't convince me that the water in the PW bottle is what's so expensive. Nestle must be making a profit. And PW, must be making a lot of profit.

by dw_a_mom Sat Aug 11, 2012 5:49 pm

jlccaz wrote:There is margin built into the retail price of the model no doubt. Experienced business people well understand that it takes time for a company to become profitable. Personally I don't think people water has a viable business model. But that is a completely separate analysis from whether the two dollar per bottle purchase price has an expected margin of profit built into the price, whether at wholesale or retail.

And in any event, this business chose a cause marketing slogan that relies upon immediate donations being made prior to profitability. That was people waters choice. Frankly the cost of one well is so small compared to gross revenues I don't think it was a particularly aggressive commitment on their part even as a start up.

I hope none of my friends from the other board see me say this, but the bolded is something I've felt from the start. But, then again, I feel that about a lot of companies I help get off the ground, and the difference between the founders of those companies and me is that they are brave enough to risk being stupid, and I am not. So I earn a reliable but not super fancy living getting paid to help them, and they someday finally try something that works and get rich (while accepting that all the failures were just part of the process).

by dw_a_mom Sat Aug 11, 2012 5:55 pm

kate123 wrote:
dw_a_mom wrote:
kate123 wrote:

The normal profit margin on bottle water can be from 50 to 200 percent according to industry figures. A 24 pack of People Water purchased on their website is $45.00 without shipping. The bottles are approximately 17 oz. (16.9) which means this water costs 11 cents per ounce. Even if their profit margin is at the low end for bottled water, that means they they're making $22.50 on each case of water sold.

I can see what is known as "gross profit" being that high, but not "profit." Profit is what is left after you've paid all the employees, interest on your debts, rent on the office. Gross profit is what is left after production costs ONLY, and even that equation gets difficult, because I have no idea if what you read uses only direct production costs, or makes an attempt at full absorption accounting. Either way, as someone who looks at business numbers for a living, and has advised numerous start ups, I do not believe in your assumptions. They are not "making" $22.50 on every case of water sold, that is simply impossible. I'd bet my mortgage on it, I am that serious.

This is really the difference in how we all view this discussion. If a company is making solid money, a fraction of a cent per bottle is paltry. But if the company is operating at a loss, and employees like Jef are barely paying themselves, it starts to look pretty darn generous. To me, knowing what I know about young companies, it was a very brave pledge. You can't compare PW to long established companies with a history of profits, because that isn't the situation they are in.

I still agree that consumers have a right to understand how much of their $2 purchase goes to wells, because that would be part of making an informed decision when faced with bottled water choices (or just going to your tap and sending a check to generosity water instead).

I can easily see a profit margin of 50%. A case of Nestle water, same size bottles, same number of bottles costs $7.00. People Water costs $45.00 a case. The only difference between the two is the water inside the bottle and maybe some extra costs for printing the bottle. You can't convince me that the water in the PW bottle is what's so expensive. Nestle must be making a profit. And PW, must be making a lot of profit.

Infrastructure in place v. having to be built
Reinvesting prior profits v. having to service debt
Economies of scale
Established contracts with stores v. having to spend time and money building those relationships
Using standard plastic v. using a more expensive type in order to appease environmental concerns
Bulk cost discounts v. not getting bulk costs discounts
Possible overseas reduced labor costs v. US manufacturing

Those are just off the top of my head. It absolutely costs PW more to make a bottle of water than it does Nestle.

by Guest Sun Aug 12, 2012 9:04 pm

Please, use this thread to discuss People Water.

Opinions are allowed, but you can't attack someone for having a different view then your own.

* The title of this thread might be changed soon*

by gurlbrit Mon Aug 13, 2012 5:30 pm

http://www.people.com/people/article/0,,20620726,00.html

Helen Gurley Brown, the groundbreaking editor-in-chief of Cosmopolitan magazine and the bestselling author of Sex and the Single Girl, died Monday in New York. She was 90.

An outspoken advocate of women's sexual freedom, Brown clashed with both feminists and conservatives as she helped usher in the sexual revolution of the 1960s with her monthly magazine that became the bible for "fun, fearless females."

"Helen Gurley Brown was an icon. Her formula for honest and straightforward advice about relationships, career and beauty revolutionized the magazine industry," said Frank A. Bennack, Jr., CEO of Hearst Corporation.

"She lived every day of her life to the fullest and will always be remembered as the quintessential 'Cosmo girl.' She will be greatly missed."

Brown died at McKeen Pavilion at New York-Presbyterian Hospital/Columbia after a brief hospitalization, according to the Hearst Corp.

Sex and the Single Girl, published in 1962 and spent more than a year on the bestseller lists, encouraged women to take pleasure in sex and enjoy their work and relationships even if they weren't married.

She headed Cosmo from 1965 to 1997, delivering a magazine known for its risqué cleavage-baring cover photos and blunt and sassy headlines about "how to find a man, keep a man and be sexually fulfilled along the way."

by jlccaz Mon Aug 13, 2012 6:06 pm

An update -- per Generosity Water website so far People Water has donated $8000. That was presumably the April 2012 donation that Cody and PW itself discussed. https://mygenerositywater.dntly.com/peoplewater

True enough, it is not "nothing' and it is meaningful to people who get the well water.

But the premise of this company remains cynical to me at its core. They are launching Monte Holm "compound recruiting" ("join the movement", be an "ambassador", by buying and distributing People Water?? Ugh.)

There are many good hearted tweets from fans/members of the public a day asking how to sign up to volunteer, help the cause, "join" the movement, etc. All represent "foot soldiers" who could be meaningfully enlisted to help clean water causes directly and much more powerfully than pooling pennies to get to $8000 for one or two wells.

And they definitely spent more on that trip, with the film crew, than $8000. Though one must concede that such publicity does publicize the plight and a solution -- building and repairing sustainable water sources.

by Chacharo Mon Aug 13, 2012 7:49 pm

jlccaz wrote:An update -- per Generosity Water website so far People Water has donated $8000. That was presumably the April 2012 donation that Cody and PW itself discussed. https://mygenerositywater.dntly.com/peoplewater

True enough, it is not "nothing' and it is meaningful to people who get the well water.

But the premise of this company remains cynical to me at its core. They are launching Monte Holm "compound recruiting" ("join the movement", be an "ambassador", by buying and distributing People Water?? Ugh.)

There are many good hearted tweets from fans/members of the public a day asking how to sign up to volunteer, help the cause, "join" the movement, etc. All represent "foot soldiers" who could be meaningfully enlisted to help clean water causes directly and much more powerfully than pooling pennies to get to $8000 for one or two wells.

And they definitely spent more on that trip, with the film crew, than $8000. Though one must concede that such publicity does publicize the plight and a solution -- building and repairing sustainable water sources.

Wow, I followed your link and I get more confused. "Donate to People Water?" Interesting. And what is up with the $50,000 goal? It looks like they donated $8,008. giggling

I do think they are intentionally misleading in their marketing. :greenman:

by Kashathediva Mon Aug 13, 2012 8:27 pm

Overall in my OPINION it's pathetic.
A charity was started as a memorial for my nephew who passed away on August 5, 2012 (yes, 8 days ago) and already my brother-in-law has been able to raise 10,000 dollars that will go toward an annual scholarship in my nephew's name for a needy high school senior with aspirations of college.
8 K is better than 0 obviously and it's going to a good cause, hopefully. Maybe PW needs to hire a new PR firm or make less of a profit? (no, that would probably be cross purposes)

by skitts Mon Aug 13, 2012 8:38 pm

Kashathediva wrote:Overall in my OPINION it's pathetic.
A charity was started as a memorial for my nephew who passed away on August 5, 2012 (yes, 8 days ago) and already my brother-in-law has been able to raise 10,000 dollars that will go toward an annual scholarship in my nephew's name for a needy high school senior with aspirations of college.
8 K is better than 0 obviously and it's going to a good cause, hopefully. Maybe PW needs to hire a new PR firm or make less of a profit? (no, that would probably be cross purposes)

So sorry to hear about your nephew...my condolences.

by Chacharo Mon Aug 13, 2012 10:16 pm

Kashathediva wrote:Overall in my OPINION it's pathetic.
A charity was started as a memorial for my nephew who passed away on August 5, 2012 (yes, 8 days ago) and already my brother-in-law has been able to raise 10,000 dollars that will go toward an annual scholarship in my nephew's name for a needy high school senior with aspirations of college.
8 K is better than 0 obviously and it's going to a good cause, hopefully. Maybe PW needs to hire a new PR firm or make less of a profit? (no, that would probably be cross purposes)

Thoughts and prayers with your family, Kasha. The scholarship is a wonderful way to memorialize your nephew.

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