For all of you that want to know how Geotraq gets paid here ha go! HUGE Margins HUGE!!!
This email was from GREGG
Remember, the base rate for cellular service without voice or data services is 50 cents per month. GeoTraq is charging iTraq $10 per module. Combined with rest of the components which cost less than $10 and you have a device that costs iTraq approx. $20 including box, shipping, etc.
However there is also service fees such as the 50 cents per month, which over three years, could cost as much as $18 bucks. However, iTraq expects most people will set their device to wakeup far more times than once per day which will shorten operational life down to 2, possibly 1 year. We are safe to assume that, although the iTraq device can operate up to 3 year, in reality we expect on average, due to the users setting, 12 - 18 months.
Although our business model calls for $1 per month, per device plus 1 penny per location lookup request, for iTraq we have waived the monthly per device charge because they will be operating their location server platform and have reduced the lookup requests 50%, charging half a cent per lookup. Considering that each device can wake up approx. 1,800 times, we should expect to receive $9 per device regardless of how many months or years it stays in operation.
So, $20 (device) + $9 (cellular service) + $9 (lookup service) = $38. So iTraq' s $39 early bird special is basically at cost however they expect to sell thousands of devices at $49 with which they make a 20% profit.
What do you think?