Building a Forecasting Model in Excel

SUP3RNOVA

SUP3RNOVA

Goober Gay
Mar 5, 2007
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I'm starting to put everything together with my product, and pretty much the last thing I need to do before I get MIDs and processing is decide what I want to rebill.

Ninety-eight dollars and forty-five cents won't work out because I actually am trying to do this legitimately. The product works great and as long as I rebill something reasonable ($49.99 or something of the likes), I think I'll actually have pretty good continuity.

I need to take the static data of the actual product price (to me), jar/tube/bottle that it's kept in, label, shipping, etc. The tricky part in the forecasting is factoring out what my

a) cancellation
and
b) chargeback

rates are going to be. I can guesstimate that myself but I need something that can take all of the above said data, compile it, and let me know how expensive every customer is going to be on average.

With any continuity product there's going to be chargebacks, but I do want to minimize the cost to the consumer because if the product actually works and they can afford it, I'll still make some good dough. Plus all the heat from chargebacks and frozen accounts and fines is just shit I'd rather not deal with. If I can have it be legit and still make good money, I'd rather take that route.
 


When I got a sample of the product I was so surprised it worked I literally laughed as the first reaction. It already just feels better knowing that I'll actually have a decent amount of happy paying customers. No shitty call support, no continuity upsells, just a product that works.
 
Haha I wasn't referring to UberCamp. I thought I recalled an interview with you and Wes talking about your product and how it was completely digital so you didn't have to deal with packaging, shipping, etc. Guess I was mistaken.
 
Different offer, different company, different time. Made a BizOpp, backend is pretty damn hard to convert, lost some money, learn and move on.

JamesH said:
Haha I wasn't referring to UberCamp. I thought I recalled an interview with you and Wes talking about your product and how it was completely digital so you didn't have to deal with packaging, shipping, etc. Guess I was mistaken.
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Sorry to hear that man, did you ever do a write up on it? And I can't really help you with your question, I don't really know anything about building products but that's one of my goals I wish to accomplish some day. I definitely wouldn't mind learning more about it though.
 
SUP3RNOVA said:
I need something that can take all of the above said data, compile it, and let me know how expensive every customer is going to be on average.
Click to expand...

That's a someone not a something you are looking for, an analyst. Which is something I got a degree to learn how to do...

First off you aren't just dealing with averages, you are dealing with variances to. For example if your customers were worth on average $50 with a 3 variance you would need much less liquid capital to scale then if they were on average $50 but with a 300 variance.

Where these variances comes from is the variance in your guesstimates on the rebill term mostly.

I know a decent bit about models and forecasting but not much about becoming an advertiser so I wouldn't mind helping you if you are interested because I know I will learn a thing or to.
 
what mike said.

If you want to adequately model acquisition cost, CLTV, and do scenario planning so that you can finance accordingly, don't just try to half-ass it yourself.

Find someone to help you out - either an employee/contractor, a good managerial accountant, or if you really want to be cheap, head over to the nearest decent business school and offer up an internship / independent study project for MBA student with prior finance experience. This is of course assuming you plan on doing enough volume to justify the up-front time / expense.
 
SUP3RNOVA said:
I'm starting to put everything together with my product, and pretty much the last thing I need to do before I get MIDs and processing is decide what I want to rebill.

Ninety-eight dollars and forty-five cents won't work out because I actually am trying to do this legitimately. The product works great and as long as I rebill something reasonable ($49.99 or something of the likes), I think I'll actually have pretty good continuity.

I need to take the static data of the actual product price (to me), jar/tube/bottle that it's kept in, label, shipping, etc. The tricky part in the forecasting is factoring out what my

a) cancellation
and
b) chargeback

rates are going to be. I can guesstimate that myself but I need something that can take all of the above said data, compile it, and let me know how expensive every customer is going to be on average.

With any continuity product there's going to be chargebacks, but I do want to minimize the cost to the consumer because if the product actually works and they can afford it, I'll still make some good dough. Plus all the heat from chargebacks and frozen accounts and fines is just shit I'd rather not deal with. If I can have it be legit and still make good money, I'd rather take that route.
Click to expand...

This isn't quite exactly what you wanted but it's a nifty tool for calculating the lifetime value of each of your customers -
http://hbsp.harvard.edu/multimedia/flashtools/cltv/customer_lifetime_value.swf
 
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Check Mike Hill's CPA Tsunami... it has a spreadsheet close to that.

Smaxor, would you be willing to share that spreadsheet?
 
Guys c'mon, you don't need to run any numbers on the merchant side. Stop asking all these complicated questions. All you have to do is buy some $1 pills and shippe'm out whenever you get a new order. Really no reason to "forecast" or "model." You're making it sound wayy too difficult.
 
Kair0s said:
Guys c'mon, you don't need to run any numbers on the merchant side. Stop asking all these complicated questions. All you have to do is buy some $1 pills and shippe'm out whenever you get a new order. Really no reason to "forecast" or "model." You're making it sound wayy too difficult.
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Yea, the $1 pills are key. Just advertise the product as one thing and then tell the lab to fill it with the cheapest filler, prolly sugar.

Best way to cut cost, then you don't have to worry about forcasting
 
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