How, exactly, does redbull make money?

DrStrangelove

DrStrangelove

Active member
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
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...
 
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.
 
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.
 
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.
 
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.
 
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
 
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.
 
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.
 
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. 
 
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
 
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.
 
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.
 
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.
 
dumb thread.... it costs them probably 50 cents to make a redbull and they sell tens of thousands of them everyday for $3
 
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
 
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.
 
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.
 
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.
 
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
 
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.

 
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
 
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.
 
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.
 
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.
 
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.
 
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.

 
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?

 
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.
 
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