"In the confrontation between the stream and the rock, the stream always wins, not through strength but by perseverance."
-- H. Jackson Brown, Author
Brian Tracy quotes of the day email
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"It is never too late to be what you might have been."
Mary Ann Evans (George Eliot)
1819-1880, Novelist and Journalist
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Josh Hinds
Inspirational Speaker, Author, and Coach
From Insight of the Day emails
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"Groceries, you need to learn how to select your thoughts just the same way you select what clothes you're gonna wear every day. This is a power you can cultivate. If you want to control things in your life so bad, work on the mind. That's the only thing you should be trying to control. Drop everything else but that. Because if you can't learn to master your thinking, you're in deep trouble forever."
- Elizabeth Gilbert
Excerpt from 'Eat, Pray, Love'
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Is retailing product a true network marketing opportunity?
On this planet, the lifeblood of any company is retail sales to the end consumer. Think about this, Business models drive the behavior in the field.
Would you agree with me that every product - doesn't matter what it is - a bottle of water, a coke or Pepsi, an aspirin, a vitamin, a liquid nutritional drink - it could be any product out here - if the quality and quantity of all the ingredients, are exactly the same, I ask people, "Would you agree with me that the wholesale manufacturing cost of any product is within pennies of each other?"
And the answer I get is, "Absolutely, no question about it, that is true."
Now here's where the problem comes in.
Marketing The Product To The End Consumer
Let me you a story. Companies A, B and C, these are real companies in real life. Company A hired a doctor to formulate the best vitamin product on the planet - and they did. it's something you can take all at once. It doesn't interact with any of the other ingredients. Works great. That company is marketing that product. They are a fairly large company, publicly traded.
Another company comes along and what's so funny about the story is the COO, the bean counter for the first company, sold his piece of the pie and became a distributor with company B.
Company B has a binary compensation plan. Now the first company is a stairstep break away comp plan, second company is a binary. So A is the stairstep, B is the binary. And the binary plan is just one left, one right.
Now, that guy said "Whoa! We had this great product with company A - now we want it with company B. So they go and hire the doctor away from company A to formulate them the best product.
And I would ask you another question. When you are a publicly traded company, you are not spending your money. You are spending investors' money. So when you put that dot, the comma, the zero on a check, does it really matter to you? Does it really matter where you put it? Absolutely not, it is not your money. It's like you shopping with my credit card.
So they hired the doctor. What that cost, I have no idea. But they told the doctor, "Make us the best vitamin product!" And he said, "Well - they've already got it in company A. But we could take that same formula and I could increase everything one gram.
So He Added One More Gram of Stuff To The Stuff
So every capsule of THEIR new stuff had one more gram in it. Great, no problem, So they created that product.
Now, company C came along, The founder of the company said, "Whoa! Company A, company B, they have got a great product. It's not patented. Don't need the doctor. Four manufacturing companies make the identical product. All I need to do is get the formula, take it to our manufacturer, see if they can improve it."
So they did. So they took the same formula and added to it, improved the formula.
Now, here is the reality, I am going to give you the retail sales price on all 3 company's products.
Company A: $114 retail
Company B: $104 retail
Company C: $39.95 retail
But Isn't The Wholesale Cost Identical?
Now, you agreed with me that the wholesale manufacturing cost of any product is within pennies. So why the big spread? If you joined Company B, I know for fact that you can buy that product at the super duper low wholesale price of 79.95.
Now, you got to ask yourself this question, since Company B's wholesale price is double the retail price of company C. why the big difference? Well, first, you need to understand that the business model drives the behavior in the field. In company A and B, the business model promotes the behavior of recruit, recruit, recruit, recruit, recruit. Why? Because normal mortals will not pay that kind of money for product.
They'll only buy the product to be in the business. So that business model creates the behavior of recruit, recruit, recruit. Now, company C, because it's $39.95 retail, that creates a behavior of retail, retail, retail. And you can prove it with these numbers.
To make $10,000 a month on the residual auto ship volume in Company A, you need 1400 - 1600 people. Company B, you need 2200 - 2400 people, Company C - you need less than 400 people. Same product. Same people you are selling to. So the big question is, can average part time people ever build a group of 2400? Or can they build a group of 400 easier? Think about that.
So The Business Model Drives The Behavior In the Field. Always!
Why is your product so expensive? Here's why, the company need a big, big, big, big, big building. It's so comical. They say, "Oh, we're debt free."Yeah. They're debt-free off the backs of the distributors, they stole the compensation plan to build the big building. Doesn't help the reps at all.
Think about this for a second. Companies A, B and C, and the breakage - that's all profits that they make out of you, the distributor. Breakage is the difference between the wholesale cost and the retail cost, that mark-up from 39.95 retail to the 79.95 wholesale. That pays for the big building, the company jet, pays for all that.
A few years back, a prepaid phone card company charged $2 or $3 a minute for prepaid phone calls. You bought a prepaid phone card back then for a dollar a minute. But these were collector's cards. ("If you don't scratch the back of the card off, and don't use the time, it makes it more valuable.")
So this plastic card, which cost maybe 25 cents to create, was selling for $2 a minute. And the company convinced the people not to scratch it off, so they never had to pay for the phone time.
Isn't that amazing? It's no wonder network marketing gets a bad name.
One way to build your business is to sell products at retail. And to do that, you must join a company with value-priced products. It's important that you look around to find that. Don't settle for a company that charges 2 or 3 times the product value. Consumers are smart. You will always struggle to build with that company.
From mentoring for free success trainings, wonderful post on the reason that people may be struggeling to find customers.
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ben@ben-drake.com
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The people who tell you that to be successful in MLM, you've got to become a salesperson are ... the salespeople! If you haven't noticed, they are very arrogant. They believe that what they do is the ONLY correct way to do the business, and anyone who doesn't do it THEIR way is a loser.
Don't fall for it.
Trying To Sell Absolutely Does Not Work!
Ninety-two per-cent of the world's population - like you and me - is sales resistant. They don't like to sell. They don't like to be sold. You go into a store, looking for a shirt or a pair of shoes, the sales clerk comes up, what do you say?
"I'm just looking."
People do not want to be sold. And then you get into network marketing and some upline superstar space commander guru leader tells you, "OK. Start by making a list of your friends & family." And the plan is to turn YOU into that pushy, aggressive salesperson that nobody likes.
Selling does not work in this business. Even if you're one of the 8% of the population who can do it, you'll never be able to duplicate, because 92% of the people who join you simply will not sell.
I go on websites and see brand new companies TODAY, and their "training" is, "Make a list of your friends & family." That's what the industry did 50 years ago. Today is a new day.
You can't be successful trying to sell. Instead -
- You Have To Really Target Your Market
Find prospects who have raised their hand, and build relationships with those people. People buy from people they know, like, & trust. You have to build that relationship.
Building relationships with people is easy and fun, when you have a system that works. For more information on our magical relationship-building system and FREE training to boom your network marketing business and your income, go to Color To Success.
To Your Success,
From Mentoring for free’s trainings, a wonderful training on a big mistake people make in network marketing.
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http://bdrake.successin10steps.com/?mad=52669
ben@ben-drake.com
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+61421464549
Helping Families live a better lives through education and teamwork.
