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How, exactly, does redbull make money?

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DrStrangelove
Posts: 1948 - Karma: 3
alright, the obvious answer is "they sell cans of energy drink" but you probably all know what im talking about, especially being around the world of skiing

EVERY time i go to a comp or some sort of special event, red bull is there with a huge truck giving away thousands of free drinks...in fact, their reps just walk around on the streets of every major city handing out free product left and right

not only that, they have to pay for all those redbull rep trucks and cars, and they have TONS of other promo vehicles that are insane...like, for instance, i once saw an armored personnel carrier that they had bought from the army for god knows how much, which they then spent at least another 30 grand transforming into a fully functional mobile DJ booth that fully folds back into the vehicle...

oh, and here's a fully mobile drop-in ramp truck...yeah, that's practical

http://www.ollieindoorskatepark.com/images/400_Red_Bull_Tank.jpg

not to mention the fact that they spend tons of money putting on events for nearly every "action sport" i can think of, even going so far as to invent THEIR OWN sports to sponsor, which i can imagine is fantastically expensive to support from a marketing standpoint alone

oh yeah, and they sponsor practically every single major athlete from every "xtreme" field i can think of...moto x riders, boarders, skiers, skaters, olympians, pilots, base jumpers, professional snorklers, mountain climbers...you get the point...so HOW DO THEY MAKE MONEY when all they seem to do is spend it on marketing...? anybody? anybody here actually WORK for redbull? i need answers...

i mean im sure they sell a ton, and i know a TON of bars have contracts with them to use redbull as mixers for trademark drinks, but i just dont see how it's possibly enough to pay for all the merchandising they do...
Feb 21 2008 6:56PM
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KRASHED
Posts: 7803 - Karma: 466
Red Bull is awesome, not just because it tastes so damn good but because the sponsor "extreme sports" and even the most obscure of them all like crashed ice and crazy batsh!t sky diving. At least you know that when you buy red bull some of the money is going into some of the sports you love to watch.

Not sure how they support one of the largest advertising campaigns i've ever seen other than fast food.
Feb 21 2008 7:06PM
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Tucks
Posts: 2120 - Karma: 161
There all business expenses it's just promo stuff
Feb 21 2008 7:07PM
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lorida
Posts: 2833 - Karma: 46

Trust me, they're not doing all those events, sponsoring all those people, and handing out those free drinks if they knew it wouldn't give them back a profit.

It's probably one of the smartest advertising techniques, that get people talking about the company...a form of brainwashing persay.

80% of the people I know will buy a Red Bull before anything else.

Feb 21 2008 7:07PM
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Ericpbp
Posts: 3161 - Karma: 24
I have seen a red bull rep passing out red bull at both of the colleges i have attended.  Its pretty cool.  I would like that job for sure.
Feb 21 2008 7:08PM
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DrStrangelove
Posts: 1948 - Karma: 3
the question isn't "why is redbull awesome," because that's fairly obvious for a lot of reasons.

i honestly think that their marketing campaign is more agressive than fast food, actually...at least considering the actual size of their company...i feel like major fast food chains can support absurd ad campaigns.
Feb 21 2008 7:08PM
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PooterCrunk69
Posts: 228 - Karma: 10
because it costs $2 for an 8oz. drink

Feb 21 2008 7:09PM
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DrStrangelove
Posts: 1948 - Karma: 3
your point is simple but poignant...i still feel like theyre spending way more on advertising than they can afford though, i want to see their earnings reports from the last couple years
Feb 21 2008 7:12PM
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eheath
Posts: 61106 - Karma: 118,269
Have you ever studied business? They make so much fucking money on advertising and shit it doesn't even matter how much they give away.
Feb 21 2008 7:16PM
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kepler.
Posts: 8761 - Karma: 139
I thought about this as well until I got a job where red bull is sold and I found out how much they charge per can...$1.40 per can from the distributor. That means that your 2  dollar can. The store you bought it from is only making 60 cents. Thats a huge difference from regular soda. So they have so much money they have trouble spending it.
Feb 21 2008 7:20PM
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rockyhockey11187
Posts: 1041 - Karma: 15
profits outweigh costs, you ever see a redbull under $2, and thats just the 8 oz. there's your answer
Feb 21 2008 7:23PM
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DrStrangelove
Posts: 1948 - Karma: 3
You have to SPEND shit loads of money to advertise dude, so maybe you meant "they make lots of money as a result of advertising." This I understand, but I think I've made the point already that I don't think they make ENOUGH money to account for all of their advertising expenses. I am open to the possibility that I am VERY wrong, but I'm just saying that from an outsiders perspective it certainly seems like they give a ton of product away and spend a bajillion dollars on other kinds of marketing. 
Feb 21 2008 7:24PM
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ax_murderer
Posts: 3322 - Karma: 30
hahaha ya dont say?
Feb 21 2008 7:28PM
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ridinpow89
Posts: 69 - Karma: 10
Red bull also saves a ton of money by having a shitty R and D....I dont think their product has ever really changed...they keep shit simple with their same old drink...not making a million flavors like monster for instance
Feb 21 2008 7:35PM
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user098123
Posts: 6072 - Karma: 18
You realize how much it costs them to make a can of redbull? Probably next to nothing, and they are charging us up the ass. They make alot of money. Sure their marketing probably costs tons, but at the same time, they get way way more back from that same marketing.
Feb 21 2008 7:39PM
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Mat.
Posts: 7167 - Karma: 94
strange, all this talk. and i personally have only ever purchased one can of redbull.

they come to the skatepark competitions all the time and hand them out. i love that. free redbull keeps me goin all day. last volcom competition was epic.
Feb 21 2008 7:43PM
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The_Oakley_Kid
Posts: 3128 - Karma: 179
Red Bull is a master of marketing, and it doesn't take a retard to see it.

their market share in the United States is approximately 65%. They are a private company so they do not have to disclose their financial statements, but most analysts estimate that their world wide annual revenue is close to 1 billion dollars.

That being said, they must be doing something right.

Their focus is advertising and marketing intensive. Which means that by investing money into things like commercials, athlete's, and events, they are getting a return on their investment. What % of a return that number is unknown. But, there is no way a company can stay in business if they are spending more than they are making.

It would help if they were not a private company so that we could see profit margins and such, but most companies operate around a 10% margin... thats after all expenses too.

So ultimately what you see is a company that sells a ridiculous amount of product.
Feb 21 2008 7:45PM
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eastAR5
Posts: 15084 - Karma: 730
dumb thread.... it costs them probably 50 cents to make a redbull and they sell tens of thousands of them everyday for $3
Feb 21 2008 7:49PM
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Pklink04
Posts: 5608 - Karma: 392
just think whats hot at bars right now, any mixed drink with red bull, every bar is pretty much stacked with a redbull mini fridge
Feb 21 2008 7:52PM
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skithesprings
Posts: 9086 - Karma: 1,349
nah, go to a Sams Club and get a case for 25 bucks.
Feb 21 2008 7:56PM
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Itsbackfliptime
Posts: 18901 - Karma: 75
I see what you're saying. They seem to spend WAY more than other companies on stuff like competitions, promo vehicles, free product, etc. It seems like Red Bull sponsors EVERY ski, snowboard, skateboard, and inline event not to mention all their crazy events like crashed ice, flugtag, the plane racing etc. How much do all those vehicles cost? I understand they have huge profit margins on their product and they must make more than they spend but for a company that only sells energy drink it seems like they couldn't be making that much money.
Feb 21 2008 8:06PM
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chicken
Posts: 6843 - Karma: 2,122
because they're fucking red bull
Feb 21 2008 8:13PM
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Skierguy1234
Posts: 1684 - Karma: 88
BECAUSE CAFFEINE IS ADDICTING!!!!
i'm surprised no one has said this yet.
its almost like handing out free cigarettes, people will get addicted, but not quite as bad.
i stopped drinking this stuff because i think its gunna go down the same road as cigs.
they're soooooo bad for you.
especially your heart.
Feb 21 2008 8:21PM
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Silence
Posts: 16030 - Karma: 149
Their entire company is a viral/buzz marketing campaign. Word of mouth drives their profits.
e.g over 500 sponsored athletes.
Instead of taking their product to the consumer, they do the opposite which is why they have over a 70% market share in over 100 countries. And they created the whole market from scratch.

They make money from selling drinks. Millions of them every single day of the year.

Their insane marketing campaigns just increase their wroldwide presence and therefore the number of people that buy their shit who also know that they are paying a premium for it.
Feb 21 2008 8:23PM
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20160Air
Posts: 79 - Karma: 11

Redbull makes money off me and my boys because we drink like 60 jagerbombs every night ... and if you disagree.. you're a fuckin skank

Feb 21 2008 8:24PM
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Silence
Posts: 16030 - Karma: 149
I remember reading that there have definitely been recorded deaths from RedBull
Feb 21 2008 8:24PM
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ferrinski86
Posts: 774 - Karma: 10
because red bull rules and it was the first true engery drink that was successfully lauched in europe and the united states. its in over a 100 different countires and consumers drink 2 billion cans a year. im sure their advertising budget is set somewhere around 5- 14% of sales. and like everybody says its probably produced at $.50.
thats why.
Feb 21 2008 8:25PM
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Silence
Posts: 16030 - Karma: 149
not even.
Feb 21 2008 8:33PM
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Tinga
Posts: 11349 - Karma: 2,333
i think we should continue to post pictures of funny red bull trucks and cars.

Click for larger image
Feb 21 2008 8:37PM
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ferrinski86
Posts: 774 - Karma: 10
even if its not they are still making money.
Feb 21 2008 8:38PM
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alaskakid
Posts: 5540 - Karma: 430
Their marketing in pure genius, thats why.
Feb 21 2008 8:51PM
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StanMcStanson
Posts: 2772 - Karma: 1
if i had that that would be so sick...but i wouldn't want to pay for it
Feb 21 2008 8:56PM
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Silence
Posts: 16030 - Karma: 149
haha the lower the cost per unit, the MORE money they make.
Feb 21 2008 9:01PM
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2+2=5
Posts: 3676 - Karma: 18
i have yet to taste a redbull. i dont know, i just havent got around to it. small can and its really expensive. plus caffeine aint goood
Feb 21 2008 9:17PM
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snowbird4life
Posts: 2265 - Karma: 26
anyone ever think about how many cans they must sell?

its kinda scary to think about all those cans and probably how little of it gets recycled.
Feb 21 2008 9:23PM
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steezyjibber
Posts: 15967 - Karma: 11,016
i actually own redbull
Feb 21 2008 10:01PM
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Skierguy1234
Posts: 1684 - Karma: 88
fuckin shower in that shit!
Feb 21 2008 10:05PM
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CMF
Posts: 1918 - Karma: 16
red bull is huge in japan
Feb 21 2008 11:18PM
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Trashpuppet
Posts: 529 - Karma: 123
i wish Wendys or Micky D's would walk around handing away free hamburgers lol..

but nah redbull is probly the coolest company out there in "Beverage" market. nah mean? cause shit u basically just said it all, giving away all the free cans and sponsor a shit load of events. most of the money u spend on buying redbull will be put right back into your hands with a free drink there handing out or being able to watch a sick comp like the red bull cold rush all for free.
Feb 22 2008 12:44AM
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emopoppins
Posts: 3996 - Karma: 269
its magic. duh. quit asking questions.
Feb 22 2008 12:59AM
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dammitmike
Posts: 2530 - Karma: 24
haha this is actually a legitimate point though. bars buy up tons and tons of red bull and then charge out the ass for the drinks they mix with it. giving out free product is just getting more and more people to try it and go out and buy it later on. i really dont think they have much other income other than the revenue from the cans, but they sell so much of it.
Feb 22 2008 1:37AM
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salamander
Posts: 815 - Karma: 16

all the ski comps and extreme sprots are chump change. check this out
http://www.redbullf1.com/
red bull has two Formula 1 teams, the most expensive/technological sport there is. that's real $$

Feb 22 2008 2:38AM
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CorkWormTurn
Posts: 1724 - Karma: 12
so am I
Feb 22 2008 4:33AM
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WikiWiki
Posts: 5584 - Karma: 426
awsome best quote ever
Feb 22 2008 6:23AM
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DANETRON
Posts: 6671 - Karma: 137
Well for people like me who have heart problems too much of it can really make your heart feel shitty.
Feb 22 2008 7:58AM
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skiP.E.I.
Posts: 7604 - Karma: 20,093

having their name everywhere on everything probably helps them sell alot of energy drinks.

Feb 22 2008 10:28AM
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=Worf=
Posts: 2468 - Karma: 25
it costs just as much for a case of red bull as it does a fith of goose.  

2dollars= 8oz can cost like 18cents to produce.
Feb 22 2008 10:41AM
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dave44
Posts: 11052 - Karma: 113
Come on... RedBull is a noun!

If I trademarked the word 'awesome' and got paid every time some one used it, I would've earnt one hell of a lot by now.

Feb 22 2008 10:58AM
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jibsworth
Posts: 1554 - Karma: 12
Simple

Their cost of sales (cost of producing redbull) + SGA Expenses (selling, general, admin) are completely offset by the revenue they generate from buying the drink....


just think about it.. how many  Purchases redbulls do you drink vs free ones?

    
Feb 22 2008 11:10AM
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Alex_G
Posts: 11902 - Karma: 1,018
hahahahahahaha
Feb 22 2008 11:10AM
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jibsworth
Posts: 1554 - Karma: 12
Also redbull must have some pretty huge profit margins, meaning the cost per consumer to buy a bull far excedes the cost to produce one, they really only pay like $25 cents per can and we pay what like $2...


so once they deduct cost of goods sold from revenue they still have a tonne of money to spend on: free drinks, autos, events, marketing, and still have profit left over.
Feb 22 2008 11:17AM
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