Does Ferrari Make More From Merchandise?

The name Ferrari is a byword for elegance.

In either scenario, the company makes a fortune selling goods to people who adore the automobiles it makes. Whether or not they are driving a Ferrari, customers purchase Ferrari memorabilia to show their support for the company. Ferrari’s marketing team is unconcerned about your fandom because they have a legion of buyers who spend $1.5 billion year on their coats, sunglasses, and watches.

The company Tree Free Heat, which recycles hemp waste from Maine into goods like portable bonfires and fire starters, was founded and is run by Dylan Veilleux. He imitated Ferrari’s business model of courting adoring customers to sell goods. Tree Free Heat focused on selling its items to its devoted supporters during a time when business would often have declined, setting a monthly sales record.

Dylan understands his clients, and they honor him by repeatedly buying his goods. Branded items is a simple way to increase your passive income if your company, like Tree Free Heat, has devoted customers. Additionally, choosing a dropshipping provider will allow you to launch rapidly and sell without worrying about stock or delivery.

  • Select the products you want to sell.
  • Choose your colors and upload your branding.
  • Link Printful to your online shop or website.

There’s no need to spend time on anything besides selling because Printful and internet platforms’ integration is seamless. Selling branded items was straightforward for Dylan because he had previously built strong relationships with his clients. All it took was reaching out to his audience and striking up a dialogue.

Selling merchandise is a simple strategy to increase money from the clients who already adore your company, especially if your company has devoted customers like Tree Free Heat. We’d be pleased to help your business get started with dropshipping if you need a hand.

Ferrari triumphs in this Ford v. Ferrari race.

In all the years I’ve been doing this, I’ve discovered that some people never experience a “poor” economy. This undoubtedly includes Ferrari customers. The renowned Italian automaker, according to CNBC, reported Q1 2020 earnings that were higher than anticipated and actually witnessed a 5 percent gain in new car sales. Just 1% less revenue was generated as well.

As a result—and perhaps shockingly—we now own a Ferrari that is now valued higher than either Ford or General Motors.

Investors are betting that Ferrari’s legendary brand name, high prices, and sizable profit margins will likely power the stock through the coronavirus crisis better than other auto brands, despite the fact that Ferrari produces only 10,000 cars annually, compared to General Motors’ production of approximately 7.7 million vehicles last year.

The market value of Ferrari rose to $30.1 billion in early trade on Monday before falling to $29.8 billion later in the day. Ford’s market cap dropped to $19.2 billion, while General Motors’ dropped to under $29.3 billion. The market capitalization of Fiat Chrysler, which separated Ferrari in 2015, has decreased to less than $13 billion. Since becoming public, Ferrari’s share price has more than tripled.

It seems absurd that a tiny, boutique sports car firm would be valued higher than a major multinational manufacturer like General Motors. However, valuations depend on one’s outlook for the future. This is a major factor in why Tesla is valued significantly higher than GM and Ford, or, in this case, the two companies together. Investors think Tesla is the future and have long doubted the ability of the established manufacturers to survive a downturn like the one we’re in right now.

In the case of Ferrari, the business is a merchandising behemoth with a brand that is maybe stronger and more significant than any of its automobiles. It is impossible to overstate the power of Ferrari’s jackets, hats, watches, and other accessories. Today, it serves more as a brand than a car manufacturer. Ferrari may be the closest automaker to being recession-proof in terms of its vehicles.

From CNBC once more:

Although there have been “few cancellations” of car orders in the United States and Australia, according to Ferrari CEO Louis Camilleri, “so far there are no red lights flashing in any location.”

Ferrari’s involvement in Formula One over the past few years is harder to assess, but hey, nobody’s perfect.

Beloved Brands author Graham Robertson

One of the most coveted luxury automobile brands in the world is Ferrari. Ferrari is a brand that Italians all over the world associate with their love of Italian culture. They make their money by actually selling fewer automobiles than other companies, who want to prove their worth by selling more. This is a fantastic case study for marketers looking to increase brand desire. Ferrari sells nearly as much goods as it does automobiles thanks to all the unfulfilled dreams. Ferrari has a solid grasp of its brand positioning.

When considering a target market, most marketers ask themselves, “What consumers do we want to get?,” but I ask, “Who wants us?”

The people you should bring in first should be the ones that are already driven. Utilize their enthusiasm to further ignite love for your brand.

When you have the most driven customers, you may appeal to their desires and create a close relationship with these brand devotees. You’ll observe how the link strengthens your brand’s ability to generate money.

How much money is generated by Ferrari’s merchandise?

Every year, Ferrari generates sales revenue of about $4 billion, of which merchandise accounts for $2 billion. All the way up to high-end luxury fashion items like a PS3,500 leather trench coat—not my style, but someone must be purchasing it—this includes model automobiles, branded caps, and flags.

All of this is reflected in how Ferrari is valued on the stock market in comparison to other well-known businesses. Investors are willing to pay a far higher premium for Team Red than they are for Ford or Volkswagen, which are currently valued at 2.8 times annual earnings and 4.71 times, respectively.

Let me use these prices to demonstrate my point: Dior is running at 20.3x, Hugo Boss is at 20.2x, and Louis Vuitton Moet Hennessey is running at 23.4x. far more similar to Ferrari than its auto “competitors”.

Michael Schumacher was one of the main motivators—pardon the pun—for the brand dominance. His successes behind the wheel throughout his reign as champion led to unfathomable goods sales, making him one of the largest and greatest sportsmen of all time.

Considering the Ferrari business strategy, despite the aforementioned, automobile sales are already catching up to their product sales. They no longer employ the 3-car configuration of a mid-engine, a front engine, and a hyper-car because of their break with design firm Pininfarina a few years ago. Instead, they now provide a wide range of cars at different pricing points, and they just announced the creation of their first SUV.

Simply put, more models translate into a larger consumer base and higher sales.

Ferrari has the ability to remain a mainstay of the auto industry for a very long time. Ferarri’s cars are selling more and more, and their business strategy is increasing.

Additionally, they have the luxury fashion division of their company to propel them into the future, give them flexibility, and help them stay one step ahead of the competition.

It would be amazing to witness them win the Formula 1 championship once more. Sainz recently earned his first victory at Silverstone, while Leclerc recently won his maiden race. Even if I support Red Bull, we are all secretly also Ferrari fanatics.

As a financial advisor, it is fascinating to observe the operation of these prosperous business models and draw inspiration for our cash management service. For brand case studies and other financial advice, see our blog.

All the non-automotive items that Ferrari sells

Ferrari-branded items is sold by the business, which is preparing for an initial public offering in New York, through its website and from 32 stores around the world.

Ferrari licenses the brand to businesses like Oakley, Tod’s, Lego, Electronic Arts, and Movado, according to its IPO filing.

Ferrari World, the company’s theme park in Abu Dhabi, United Arab Emirates, also pays royalties. It intends to develop a second theme park in Spain that will also have a hotel with a Ferrari theme.

The corporation made roughly $474 million in sales in 2014, including income from sponsorship of its Formula 1 racing team, and the website brought in $7 million.

Contrarily, sales of automobiles and replacement components brought in $2.2 billion in revenue.

Ferrari hopes to collect approximately $900 million in its initial public offering and have a valuation of $9.8 billion.

Here are a few non-automotive products that Ferrari sells, listed by price.

Ferrari products are a lucrative market.

Ferrari has grown to be such a well-known brand and status symbol around the world that selling anything bearing the company name and insignia has become a lucrative industry. Ferrari offers products at retail locations all around the world for about $1.5 billion annually.

Ferrari products include apparel, watches, sunglasses, shoes, phone covers, and, of course, scale models of the automobiles. These products are designed and produced at 30 offices across the world. Many of these products are anything but inexpensive. A 1:8 scale replica of the coveted Ferrari F14T costs $5,400. Retail prices for Ferrari sunglasses exceed $200. All of these factors combine to make Ferrari one of the most valuable automakers in the world.

How much money does Ferrari make from its products?

Ferrari’s sponsorship, commercial, and brand segment, which comprises the Formula One team and revenue earned by the brand through merchandising, licensing, and royalties, contributed 11% of the company’s net revenue in 2018, down from 14% in 2019.

How does Ferrari make the majority of their revenue?

This statistic shows the annual net revenue by business line for the Italian sports car manufacturer Ferrari from 2013 to 2018. The automotive and replacement parts business segment accounted for the majority of Ferrari’s annual revenue. As of 2018, the net profit from shipping cars and selling spare parts was approximately 2.5 billion euros, while the net profit from selling engines was 284 million euros.