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Price of Products For the most part MLM is responsible for delivering some of the most expensive products to market. The Dream Weavers would have you believe that the quality of those products is so superior that they simply must be sold for more money. That it is the very quality of the products which makes them a prime candidate for MLM sales. If left on a shelf these wonderful products can not compete with lesser quality, cheaper products. To an uneducated consumer one bottle looks like the next. The Dream Weaver tells us that this is the incredible power of this form (MLM) of marketing and that by simply sharing the story of the vastly superior products is the very seat of our opportunity, because, of course, we have the exclusive rights to these products. Sounds pretty good doesn't it? There actually is quite a bit of truth to it, but it is far from the whole story. Let us consider two groups of products for our investigation; Nutritionals & Water Filters. Since most MLMs sell nutritionals lets start there. Without getting overly complicated and getting into company bashing I would like to make a few points about the price of nutritionals available through different channels of distribution. The following table presents data from a publication called Dietary Supplement Market View in the July 1999 issue
I Have included real numbers here because I get more guff from people who have emotional attachments to their "life saving product & life enhancing MLM" that I generally can't even get all the way through the argument. The points are as follows:
MLM Has Some High Priced Products... No Duh! Now here is the rub; you need ever increasing sales skills to more increasingly more expensive products. You had better darn well be good at telling that story about your product and that product better deliver serious results. OR You better have a really incredible "once in a life time" opportunity for people to buy into.
As Price Goes Up, Sales go Down... I am not trying to insult your intelligence here but after spending a decade in MLM I believe this has to be spelled out in black and white. Interestingly if you look at the table above you will notice that the $7 to $10 dollar a unit price point really culls the pack. A 50% increase in price results in a sales decrease of over 80% To The End Customer, Even If The Product is Ten Times As Good, Is It Worth Three Times The Price?... Well the ten times a good quotient is hard to quantify (unless you are talking to a Dream Weaver who has some clinical study) but according to the numbers most Americans are fine with the grocery store variety which outsell MLM 6:1. You would think that after 50 years of "educating" consumers that more folks would want the vastly superior products. Or, could it be something as simple as consumers don't really feel they are getting a good bang for their buck with MLM supplements? That brings us to our next point.
Are people paying these exorbitant prices because of the value of the products or to maintain a position in the money game part of the program? This is a question Attorney Generals ask all the time and it would be wise for us to consider it too. Supposedly there is a 70% rule in the MLM industry which basically means that 70% of inventory is sold prior to purchasing more product. The goal is to not have people simply purchasing products to participate in the compensation plan. That would make it a dreaded pyramid and the game would be over. Most MLM companies would have you believe that buying and consuming the products yourself counts, so long as you are not stock piling the products to get a check. But how does this fit in with the greatly superior products MLM is suppose to offer? If they are so good they should be much easier to sell. If for example the products really are ten or TWENTY times better than similar products from the grocery store, why are sales six times better in teh grocery store? Well lets forget this for now and move on to the last point. Lets assume that the Attorney Generals finally concede that the buying club model (as practiced by well over 99% of the operating MLMs) is acceptable, what I want to know is...
Where in the hell are all the savings MLM is suppose to pass on to end consumers through the efficiency of "direct from manufacturer to customer marketing"???? You know the story as well as I do. This superior channel of distribution is suppose to bypass the jobbers and middlemen and deliver superior products to end customers with out all of the advertising costs yadi yadda yadda. How did the price get to be three times as much in this revolutionary system?
The fact is this; If MLM ever wants to be considered a legitimate form of business by most Americans they will have to deliver legitimate value and an extra ordinary "Bang for the Buck". I have seen companies who boast an actual net payout to distributors of over 67%!! Care to venture a guess as to where the money could possibly be coming from??? You know if you design a compensation plan right and charge enough for your products you could even get 70% to 90% pay outs. And I would be willing to bet that if you had a Dream Weaver explain it to you that it would be upwards of 125-135% actual pay out to the distributors. <LOL>
Enough Typing, I'm Thirsty <grin> So lets wash down our high priced pills with, water. Without getting into a pissing match with any water filter MLMers out there I will assert that about the best kind of water filtration system out there is reverse osmosis. I got an under the sink model for the kitchen for about $150 at our local buying club store, that was a better deal than the local hardware superstore. I must say that I really appreciated the education I got from some of you water filter MLMers but I didn't feel it was worth the extra $600+ dollars it would have cost me to get a comparable system from you. Of course I could have gone for the "Whole House Solution" by taking out a second mortgage!! Now unlike dietary supplements water quality can be measured & I can safely say that the $800 reverse osmosis system doesn't do three times better than the $150 reverse osmosis system. But oooooo that comp plan......
Then again I may be completely off base here. How does the old saying go?? "You Get What You Pay For!" But don't worry this is MLM. If you are experiencing difficulty breathing while paying through the nose we have a vastly superior product for stopping the bleeding........ and it only costs an additional $49.99 a month on Auto-Ship.
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