Fitbug - Sales Forecasting

I've already had a brief look at coming up with some vague estimations for the sales profits we could expect from Fitbug, but I felt that I ought to go into more detail regarding this aspect, as it seems to be an aspect that's discussed on bulletin boards without always the use of data to substantiate points.


Some of this post will be repeated information from slightly older posts where the data we know hasn't changed. As per usual, I am not FCA authorised, so this shouldn't be used as investment advice, etc.


The Maths:


We know that Fitbug are retailing in 1800 Target stores in the US and in 293 Sainsbury's stores in the UK. We also know that they are being retailed online and or in store by major retailers like Amazon, Apple, Tesco, Argos, Dixons, Walmart, Kmart, Frys Online, Mvideo (Russian retailer), Stuffz, Ideal World (shopping channel), etc.


I will assume that Fitbug only makes £5.00 profit per unit it sells and let's assume that these 1800 Target stores and these 293 Sainsburys stores only buy 100 units each from Fitbug between being stocked and the sales figures being released (I've picked 100 because it's just over the online sales figure from tiny online website I've never heard of in the last 30 days - see the references below for more details):


1800+293=2093 stores

2093*100*5= £1,046,500 Fitbug Profit


- I'm going to add into this calculation a quarter of Tescos total stores to the mix (not all will be big enough to sell the Fitbug - 2500/4) along with total number of Argos stores (737), Dixons (530+322), Kmart (1077), Mvideo (330), RadioShack (7150)


This gives a total number of stores on the ground of 1800+293+(2500/4)+737+530+322+1077+330+7150

Total number of stores= 12,864


Now, let us assume that each store buys 100 units from Fitbug:

12,864*100*5= £6,432,000 Fitbug Orb Profit


With 44% of Christmas shopping being done online last year, it makes it harder to get a real idea of (what I perceive as) the huge potential this company has in terms of sales. To get an idea of what online profit from sales are likely to be like, along with the on the ground store profit from sales, we could probably just double that last figure, giving us around £12,864,000.


However, I think that realistically, as Tesco have only just come back in stock of Fitbug Orbs, we could add half again to this figure at least, as major retailers are likely to have tested the waters initially with their wholesale purchases and purchased small lot sizes and also due to this restocking need. Due to this, I feel that it wouldn't be unreasonable increase this again by half to account for this high stock demand:


12,864,000+6,432,000= £19,296,000


Remember that my forecasts are only for sales of the Fitbug Orb (not the only product Fitbug offer), these are excluding all online sales of the Fitbug Orb, these are excluding any health insurance/provider related sales and they based only on the sales between late October and the expected January results.


Personally, I believe that the actual profit from sales will be significantly higher than this, because there are a lot of revenue streams that are either unaccounted for or very difficult to estimate (Apple Online Store sales, Amazon, etc), but I implore people to do their own research and decide for themselves.


In my opinion, it looks like Fitbug have the potential to make more in sales profit from their Fitbug Orbs alone between October and January, then their current market capitalisation. Furthermore, we must remember that technology companies are often valued more on potential than actual figures, so as a company that actually has cash in-flows, Fitbug represents for me a great opportunity to profit substantially in the run up to Christmas sales and the post-Christmas fitness flabaganza.


Extra Reading:

Old Research and forecasts:
http://themaskedstocktrader.blogspot.co.uk/2014/11/valuing-fitbug.html

Fitbug - The Gift That Keeps On Giving:
http://themaskedstocktrader.blogspot.co.uk/2014/11/fitbug-gift-that-keeps-on-giving.html


References:

Estimating Sales Revenue:
http://www.lse.co.uk/share-regulatory-news.asp?shareprice=FITB&ArticleCode=rdzzvudg&ArticleHeadline=Fitbug_to_be_stocked_by_Target_and_Sainsburys

Small Online Outlet Sales Figure:
http://shirinsevents.com/hype.php?id=fitbug-orb-activity-tracker-retail-packaging-black-p-14145.html?zenid=f3cbd595cd93e572e891c5d5ac43080c

Tesco Store Number:
http://en.wikipedia.org/wiki/Tesco

MVideo Store Number:
http://en.wikipedia.org/wiki/M.video

RadioShack Store Number:
http://en.wikipedia.org/wiki/RadioShack

Argos Store Number:
http://en.wikipedia.org/wiki/Argos_(retailer)

Kmart Store Number:
http://en.wikipedia.org/wiki/Kmart

Fry Store Number:
http://en.wikipedia.org/wiki/Fry%27s_Electronics

Online Shopping Statistic:
http://www.msn.com/en-us/news/us/report-44-percent-of-holiday-shopping-will-be-done-online/vp-BBbb4St

All the best,

The Masked Stock Trader