I'm sure you've heard this before, why the products of top network marketing company so expensive?
This is one of those ubiquitous Questions networkers and direct sales continue to deal with (probably) never - and there is always more than what looks like a simple answer.
A key is not dodge. There are good and real reasons for legitimate products, the premium price - and of course those are not too expensive too. Honesty is the best, as always, and I try to give you the general truth of my answer.
Special products at special prices
Firstly, the products offered by Top Companies network marketing sales and distribution model are mostly "special" called articles. The products are to start with a higher price, which has more expensive ingredients and more complex designs or formulas; are simply more expensive to manufacture and package. Examples marketed outside the network are known for Clinique makeup and fragrances, Apple computers, iPods and iPhones, Armani clothing, Mercedes and Lexus.
Unless you're dealing with a scam or scheme, these high-end products outweigh the cheaper counterparts off-the-shelf, providing consumers with more and better benefits. Because they have a higher value, which cost more.
If these products are subcontracted by the company network (produced by a "third party" vendor / supplier), tend to be manufactured in small production runs that do not allow all the best advantages of low cost purchase and decision making massive amounts of high property sellers. Manufacturing processes are more complex and unique. Profit margins are higher. This results in a better product, with more attention to detail and quality control.
The reason manufacturers and marketing companies select the network marketing and direct sales because these more expensive products are of better quality and therefore require special methods of distribution and sales.
In short, they can not compete with cheap products of lower 'products' quality are sold mainly based on price reduction and the reputation of the mass market itself. Think Wal-Mart and Costco.
Special products are "educational work." They need more explanation; for example, what is the formula, ingredients and / or process makes more expensive than consumer products available through direct marketing (such as Internet and e) sales or retail chains product. Many require demonstration.
Consumer products rely on advertising, promotion and marketing in the "point of sale" which are necessary to attract the attention of consumers know that the product exists (to create "trial" particularly if the "brand" new), and give them enough reasons to acquire and keep on buying.
Going head to head with the products that are advertised nationally, many of which most are heavily discounted and sold at the lowest possible price, this is a difficult game for almost all small businesses to win. Imagine trying to sell vitamins or nutritional drinks or cosmetics "prestige" against a large manufacturer that sells through Wal-Mart, or natural toothpaste from a tube of Crest ® by Kroger or Publix supermarket.
Special products are perfect for the person that a rich person in the teaching of information, demonstration and methods based marketing services network.
And this is the second important aspect of the "higher" network marketing comes into play: the added value you as a "distributor" adds special products you sell.
Added value added
Network marketing and direct sales representatives provide added value to their products and are well paid when they do successfully.
We consumers aware of new products and services and merchandising ads - no matter how persuasive or promiscuity - they would not be able to reach out and touch. And under our personal relationship head-to-head with these buyers, we appeal to them with a level of trust and non-mass market services, product retail advertiser can hope to compete with.
The extraordinary level of network marketing to provide services not available when buying by mail or outlets. This is a real and tangible benefit to the value of the product - and its price.
For example: Someone is a network marketing anti-aging health. Personally appeared them - whether in person or by mail - with a lot of educational material about the product: scientific studies, reprints of articles, even books or tapes that explains how products are made, how to use their unique features and benefits.
In one or two days, the network marketing back in touch with the person to follow, wondering how they are to verify that your client is correctly followed the instructions, make recommendations, etcetera. These service calls are daily, weekly or biweekly until the customer is satisfied and happy.
Network Marketing will also continue to send updates of information and education materials such as scientific literature. He or she will also inform the consumer of the other products offered by the company of that particular client to their unique needs and wants may also enjoy.
It is an extraordinary level of service is a real and tangible benefit to the consumer. This kind of personal attention and competent is not available when purchasing via the Internet alone, or by mail or at most stores. One of the things that network marketing are paid and is part of the value of the product - and its price.
Are there cases where they are not offered education and services above? Course.
Are there any products that contain ingredients or special qualities that support a higher price? Clear.
And there are times when a network product on the market is simply more expensive to pay for the fee structure of different levels? Yes I do.
Back in the 1950s, dog grooming service opened in the city of New York to serve the people living in the exclusive Park Avenue, 70th and 80th Streets area. They pay $ 25 for a shampoo and dog clip. Had no customers. Then they shot their prices to $ 250 per visit - and were an immediate success. Cadillac Seville at the first introduction in showrooms test market at a price of less than $ 10,000, bombed; $ 14,000 for the same car became an instant bestseller.
The value is a perception. The relationship between quality, performance and price, ie, the value is in the mind of the consumer-spectator. Companies prices of goods and services based on what the market will bear. Effective marketing comes with the perfect blend of value for money and benefits.
Most direct sales network marketing products are of the highest quality genuine variety, are not available in stores, especially ingredients, design and manufacturing.
Most offer the convenience of home delivery or order online and the door. They are special in the ...
Marketing and Customer Service
The "seller" network marketing adds value to the product by education, customer service and sales.
All this has a price. And according to consumer trends and the explosive growth of direct selling companies marketing network and its products around the world, people more and more every day, I think it's worth.
What is the truth about the prices of products offered through network marketing? Are they too high? And if so, why?
The complete answer to this question is complex. If you need a word, mine is:
Top? In general, yes.
Too high? Sometimes ... yes, but not usually.
Therefore, if they are high, why? Let's start by looking at what kind of products we are really talking about here.
In fact, specialty products more expensive
Network marketing is essentially a "special products" business: The products we sell most often tend to be the kind you can find in supermarkets, drugstores and other mass merchandiser. They are not the type to combine the best price possible for the minimum acceptable level of quality. For a conventional parallel to browse products in a physical store or health food, beauty salon, boutique or luxury department store retail.
Special products are more expensive to manufacture. The ingredients are unique and production of high quality and quantity is low - these quantities are generally not large enough to benefit from economies of scale enjoyed by big-time, high volume, mass-market producers. Thus, these products more expensive - to make and to buy.
In addition, specialty products generally can not rely on increased advertising to increase sales: they do not have that kind of money. Therefore, they must use the more expensive distribution, such as small individual outlets, whose profit margins are higher than the mass market stores and chain forms.
Profit margins and margins
Here is an example: pharmacy chain discount might be able to work with a bottle of vitamins that normally sells for $ 3.00 in bulk for less than the normal range of profit 33 percent lower. And because they buy in large quantities, they will have the product for less than $ 3.00 to start.
A store or health food health could buy the same product at $ 3.00 wholesale price completely, and use a margin of 50 percent of the profits of 33.3 percent full lower profit margin.
For consumer purchases, retail, here's the difference: $ 3.99 to $ 4.50 and pharmacy at the health food store.
And then there's "what the traffic will bear."
There are boxes of chocolate sexy imported from $ 38.00 each, and polyethylene bags 50 mini Reese peanut butter you can get for less than $ 3.80. If your taste tends to face, you usually pay more - half percent "margin" of people and total dollars.
Here is a comparison of a single product offered by the traditional distribution-system manufacturer to the retailer and the same product is sold through network marketing.
$ $ Since the conventional manufacturer to consumer
We special products are more expensive to make; Moreover, the ingredients are unique, high quality and the quantity produced is low, so they are a bit more expensive.
Manufacturers refer to "Cost of Goods" (COG) is the number of a product that costs the company to do, including overheads, ingredients, packaging and labeling, commissions Information (eg, brokerage fees), etc.
At least one manufacturer to sell the product to double a margin of 50 percent. Because the most competitive companies operate at a profit before tax increased by six percent, leaving 44 percent to pay for everything else. Therefore, the product of $ 2.00 COG they do, they sell for $ 4.00.
Now, some manufacturers sell directly to retailers - not much, but some do, and when they do, they will have more room to pay the cost of sales (CoS) services.
However, most manufacturing companies are through distributors, who charge for storage, transportation and sale of products to retail stores. Wholesale standard is a marker of 25 percent, which is obtained by multiplying the purchase price - plus shipping costs if not included - by 1.33. Therefore, our product is sold $ 4.00 wholesale distributor to the store for $ 5.32. (Again, more or transportation costs that can run from 10 to 15 per cent extra.)
To achieve a margin of 33.3 percent profit, the retailer has a profit margin of 50 percent - or more. Our product ends $ 7.98 $ 5.32 rack.
Now, this is the minimum scenario - is not what normally happens except in the most competitive markets. It is not uncommon to find a manufacturer that sells this product COG $ 2.00 for $ 5.00 or $ 6.00 ... retailers work to 35 percent instead of 25 percent and a ... retailer - especially specialized segment of the market - Find a profit of 50 percent (or a profit margin of 100 per cent), rather than "only" a third party.
And if all this were true, the selling price of the product through the sales system and the distribution would be more like $ 14.95.
$ In Network Marketing Direct Sales
We will work backwards (because that is how most of the figures are calculated for commissions).
If the proceeds of the network society sells to consumers for $ 15.00 which will commission average selling NetWorker 20 percent to 40 percent. Thus, using less than 30 percent commission, the price of the "big" company for MLM distributor will be approximately $ 10.50.
Suppose your company pays a total of 50 percent in the "downline" or organizing committees. This means lower stock price of the company for the product would be a means wholesale or $ 5.25.
It is in the stage of manufacture of specialty, distribution and sales.
It is a question of value
There is also a greater value beyond the problems of quality of ingredients, the manufacturing cost and so on "special products" and therefore education, and information provided by the distribution network of a person service person.
Learn the proper use of the product, other uses, history, all about ingredients, etc., all of its value. And products offered by the word of mouth network marketing have more of this "value added" than any other.
This last point brings us to the question:
"The products purchased on network marketing, with higher compensation or commission payments to distributors and their networks cost?"
Can it be? Yes I do.
Are ... in general? No and yes.
In an authentic, sincere and sensitive direct sales network, which is managed and run ... a company that understands the financial health and well-being of men and women in smart marketing company must take your mission decisions, strategy, policies and procedures ... no.
But this stylish new headquarters in the prestigious location ... corporate jet ... a military commander "service" dealership personnel ... rock concert "conventions" ... $ 50,000 speakers "big names" holiday resort ... exotic locations Cruces incentives paid by the company ... sales of luxury cars ... all fees must be paid. Where the money goes?
Directly (in terms of all costs that are not going to pay people) or indirectly (overpriced products and / or inflated fees for marketing materials, self-replicating Web pages, tools for business development and training ), the money comes from one place ... men and women in the field.
"So ... this network marketed products more expensive?" Sometimes yes and sometimes no.
May be more expensive than similar items of equal value offered in a conventional market as a retail store? Yes, they can.
In fact, you can find many examples of these two products typically retail and network products of similar size, shape and quality at prices ranging from 30 to 40 percent or more.
The only safe rule in commodity prices in the world, ie, "What the traffic will bear ..." No matter what the distribution and sale covers road product. Not so much a game of "Let the buyer beware" because it is and always will be ...
"Let the buyer be warned."
Factor in the ease of shopping at home ... customer service ... satisfaction guaranteed ... care ... education and information - and on the world market increasingly competitive, posture "aggressive pricing" that is becoming more and more networking companies worldwide - with the highest overall quality of products through network marketing and direct selling ...
And I think ... a growing number of quality-conscious consumers will agree with me, the first company's product marketing network that represents outstanding value.