Posted by Mike Akins on June 30, 2000 at 00:32:30:
In Reply to: transfer buying posted by Pat-n-Tina on June 30, 2000 at 00:11:30:
Hi Pat-n-Tina,
Transfer buying is an important feature in the over-all picture of network marketing. Twenty to thirty years ago it was even more important. Actually, until HerbaLife introduced the world of herbs and Forever Living introduced Aloe into network marketing, there wasn't much in the way of cutting edge products to work with.
As the industry has matured there has been a shift in paradigms. It is very difficult for a network marketing company to compete with the conventional market in these types of products. In the old days mlm companies pay out less than 40-45% in commissions. Now many are paying 50%-60%. In that time period mlm companies were able to compete with conventional companies by concentrating products. The conventional market was not heavily into the concentation arena. Also, the conventional market was not into vitamins to any great extent, so what was on the market was expensive. The mlm industry didn't have any problem competing with the conventional market on a price basis.Now we live in a day that mlm companies cannot match the prices of the conventional market. It is very difficult to transfer buy.
This is important because of the "75% product user factor." Often, I hear networkers say that you can keep an organization together because the marketer will prefer to buy from himself, even if the product cost more. The problem is that 75% of your organization, mathematically, cannot be into profit. There have to be into it for the validity of the product. They will not buy the product just because it is in their product line.
Another challenge is that in the past decade there has been sensational product growth waves. The top mlm programs of the previous decade began with sizzle products and moved into transfer buying based on offering a higher quality product than what can be purchases on the conventional market.
You have to approach the market on a basis of what works. Although, theroretically the philosophy of transfer buying is valid, it hasn't done so well in practice during the past decade. Higher Ideas, Melaleuka, Nutrition For Life, and a hand full of other companies tried for a decade to function on this basis. Their growth has been very slowl compared to the companies which hit the industry with a "hot product." Such as Kaire, Cell Tech, Mannetech, Life Plus, Nu Skins, and New Vision.
The ideal methology is to introduce our program with cutting edge products and then bring in transfer buying products as the distributorship base broadens and product loyalty develops. Thanks for the questions and welcome to our group. You are in a very exceptional group, the Art Lacoste team. I believe Art and his team are going to set some records in 4Life.
Mike Akins