How to Price your Raffle Tickets
Research shows that the majority of organizations that hold raffle ticket fundraisers do not know how much money they will make until after the raffle is over. Nearly all raffles have a target amount of money that they would like the raffle to produce. What they do not know is that there is a simple calculation that can be made to see how many tickets, and at what price, an organization will need to sell raffle tickets in order to meet that goal. By playing around with the quantity of raffle tickets and the ticket pricing and matching the customer base, it is fairly easy to plan a raffle so that all of the fundraising goals are met.
This calculator will perform all of the required calculations for you to help ensure that your next raffle ticket event is a success. The rest of this article describes factors that should be taken into consideration when planning a fundraiser. Please feel free to play around with different values in the calculator until you find the best raffle ticket pricing for your event.
It is important to know how much profit an organization would like to earn during a raffle ticket event. This value should be the ideal net proceeds to the event after all other costs have been subtracted.
There are several costs that can be incurred during a raffle ticket event. The list below contains the most common ones.
Raffle Ticket Costs: whether you print your raffle tickets yourself or have a company like TicketPrinting.com print the tickets for you, your raffle tickets are going to cost money. Often times the look and feel of the raffle ticket will help convey a sense of value to supporters allowing an organization to charge more for them. I have talked to customers that wanted custom raffle tickets designed that looked expensive so that it would be easier for them to sell the raffle tickets at a higher price. This price should include all costs related to getting the raffle tickets (shipping, sales tax, and other fees all add up to produce the total cost of generating the tickets that you will use for your event).
Raffle Prize Costs: Most companies, that are would be sponsors, do not have a pile of free stuff in their store that is free for the taking (at least not something cool enough to make people want to win it). Most often, prizes are paid for by the organization that is holding the event. Most Companies are willing to give you a prize at a reduced price after they are convinced of the publicity that they will be receiving as a sponsor to the event. Remember to look at things from the point of view of a sponsor before selling them on the event.
Raffle Ticket Distribution Costs: The distribution costs of a raffle include all of the related costs of marketing and selling raffle tickets. This could be posters that will be printed or even television or radio commercials. What ever the costs are; they will be a factor in how profitable the event is.
Total Expected Raffle Ticket Revenue
The total revenue that an organization will receive as a result of the sales of raffle tickets is a factor of two things: the number of raffle tickets sold, and the price at which the tickets are sold. These are most likely the two variables over which an organization has the most control and the ones that are most important to match up directly to a specific customer group.
Quantity of Raffle Tickets: The quantity of raffle tickets should be decided upon while thinking about the number of people in the community who are likely to buy raffle tickets. It is important to remember that people often buy more than one raffle ticket and this can be encouraged by offering a discount for buying a larger quantity of tickets ($5.00 each or 5 for $20.00 is an example of pricing with quantity discounts).
Price of Raffle Tickets: The price that can be charged for raffle tickets will depend on the prizes that you are offering and the demographic of the target market. Selling $100.00 raffle tickets to college students might be a long shot as would be selling $15.00 raffle tickets for a chance to win a $20.00 DVD. When deciding the price, it is important to consider how much the prizes would be worth to most participants. It will also help boost sales if the ticket price is a convenient dollar amount (most people do not want to pay $3.76 for a raffle ticket, people also like numbers such as $1.00, $5.00, $10.00, $20.00, etc. because our money comes that way eliminating change).
Finalizing Price and Quantity of Raffle Tickets
Once you have an idea of the price that people will pay for raffle tickets and how many tickets can be sold, you can calculate how much money you will earn. First, add up all of the costs of the event. As an example, $75.00 for Raffle Tickets, $500.00 for prizes and $50.00 for additional marketing materials would give us a total cost of $625.00. The next step is to add the fundraising goal to that value. If we wanted to raise $2,000.00 we would add that to the $625.00 that we already have spent to get $2,625.00.
Calculate Price of Raffle Tickets: Once we have the total revenue to be raised ($2,625.00) we can find out what the price of the tickets would need to be for a given quantity of raffle ticket sales. To do this we divide the total revenue by the quantity of tickets. As an example, if we thought that we could sell 1000 raffle tickets we would need to sell each one for $3.63 to reach our goal (I would recommend that we round up to the nearest dollar or even to the nearest bill increment, $5.00).
Calculate Quantity of Raffle Tickets: To calculate how many raffle tickets we need to sell we can divide the total amount of revenue by the price of the tickets to find out how many tickets we need to sell. In our example, if we wanted to sell each ticket for $5.00 we would need to sell 2625/5= 525 tickets to meet our goal. Again I recommend always rounding up as most organizations can deal with extra money easier than they can with too little money.
This simple calculation will make it easier to plan profitable raffle ticket events that do not leave you guessing how much money you will make.