Networkers have heard that for years. But what if it’s members of the network marketing community who say it?
One gent (in the business) described his network marketing ‘work’ here as being made to:
“retail a bunch of (overpriced) products!”
And Rani, our NMC friend who markets Sunrider products, has an upline who tells her to forget customers because, she says, the products are too expensive and that the only customers will be people who ‘invest’ in the business.
That’s why “getting customers,” the upline adds, “it not duplicatable.”
Oi vey.
On the other hand, some say networked products are higher quality and more cutting edge than the stuff at GNC or Wal-Mart.
“I discovered that the best antioxidants were made by network marketing companies,” says MD Stanley Lang, also an NMC member.
“I’ve been a physician for 25 years. About 10 years ago, I wanted to recommend antioxidants to my patients because I thought it would help them avoid cancer and heart disease…
I looked at a bunch – over 100 and the ones I decided on were all made by network marketing companies…I thought they had the highest quality and safety factor, and I thought they had the best blend of antioxidants.”
So what’s the story?
Are MLM (network marketing) products overpriced? How can you tell?
And if isn’t true, what should you do?
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Let the world help you get customer matches with, “If My Product’s So Great, How Come I Can’t Sell it?” or the Customer-gathering 3-Scripts CD program here.
Most network marketing companies have great products. Some ARE overpriced. The business model drives the behavior in the field. Ask yourself – would you sell a product to your mom/dad at retail? For most NM companies, the answer is a resounding NO. Therefore, the business model of high retail priced products drives the behavior of RECRUIT, RECRUIT, RECRUIT.
The reason most NM companies have high prices is called OVERHEAD. Why would any NM company need a massively huge building with hundreds of people answering phones? This is the year 2007 and the majority of the company’s business should be done on the internet. Yes, a few people answering phones is necessary, but hundreds? I think not.
That brings me to the building. The massively huge building of most NM companies. Who pays the window washers? Who pays the upkeep? Sprinkling the grass, restriping the parking lot? Cleaning the building? Salary for hundreds of employees who are not really needed? Who pays for all of that overhead? THE REPS.
The ONLY way a NM company makes money is through the sale of product. A streamlined company can afford to sell that product at a lower price AND pay more to their reps. A company with massive overhead can not. They have to jack up the product price.
Business models drive the behavior in the field.
Roxanne
I think this can be a difficult question. What makes it difficult is knowing the quality of ingredients that are used in a product. If a person does not understand or know about the quality of the ingredients used in a product it is hard to tell if it is actually over priced or not.
All most pepole have to compare prices with are products they see in a traditional retail setting. Often times they may be comparing apples to oranges.
I feel this is an issue that requires education of the representative selling the product so they understand why a product is priced the way it is. It is ture some network marketing products may be over priced but this has to be evaluated on an individual basis.
It is also true that traditionally sold products in stores can be over priced too. I know for a fact that many companies that make skin care products spend very little on their ingredients. Much of their money is spent on the millions of $$ they spend on advertising in magazines and TV.
If consumers understood this, they might make the same remarks about traditionally retailed products being over priced as well.
If a company’s products are truly unique, it can be difficult to gage whether or not they are overpriced. People will pay a premium for something that works for them. But if you can get an equivalent product elsewhere for less, then, well, your products are overpriced. Another strong indicator that your products are over-priced is if you can’t get customers. (I wrote my feelings about that in the “Selling the Dreams” post.)
There are some MLM products that are actually very competitive. Photomax, a division of NuSkin, falls into this category. For example, you can order digital prints for $0.12 each, and you get 5 Gb of free storage. Nearly all of their other products can go head-to-head in the market. For that reason, it is very easy to find Photomax customers.
I had a friend that asked my about the shave cream I market. I told him about it, and he said he’d try it as long as it wasn’t over $3. So, to him it was expensive. For me it wasn’t . . . years before I used the Nuskin shave cream, I used a Paul Mitchell shave cream that cost $20 for a smaller tube. So, I know at least some men are willing to pay extra for something that is kind to their face!
On the other end of the spectrum, I have a new distributor who, literally hours before she found out about NuSkin, had purchased about $400 in skin care products from a salon. She was mortified to find that the NuSkin products worked better for her at about 1/3 the cost. So, for her, NuSkin products are *less expensive* than the others.
A final thought on keeping the margins high on MLM products — I get a kick out of some of the marketing that goes on in the functional juice arena. A company comes up with a unique drink and markets it as one of a kind. Then a competitor comes in at a lower price point. The first company now has to market differently, such as “first to market” or to claim that they have the only formulation that is high quality (it has a spectral signature) so they can justify the higher prices.
“This products too expensive.” Those were the first words out of my mouth when my sister told me about this product.
18 years later… with healthy girls, no doctor visits, energy for school & work which I attribute to Chinese Whole Food Concentrates…
Each bag of herbal tea I use makes 5 cups so it’s very concentrated & helps gently clean out the toxins we ingest daily & gives me energy in the afternoon & costs less than a soda.
A famous man once said: “Take back my statement & reverse it.” Willy Wonka
vicky
http://vicky.networkmarketingcentral.com
Some may be, but IMO not really. It’s all about the value. Like Kim says in her “IF My Product Is So Great” book, since you’re asking for customers just like you, the price won’t be an ussie. If it’s a value to YOU then it will be of value to them. Every product has a market. For example: some people will buy some cheapy hair vitamins from vitamin shoppe for $12.50. Another person will spend $300 on Nioxin. Is Nioxin over-priced? Not to the market that purchases it.
Some people like payless, some prefer Manolo’s (ME!!!). Some shop at Macy’s, some prefer Walmart. Some people like Ford’s, other’s like Mercedes. The customer I’m looking for is like me. They don’t put a price tag on health. Shoot, people put more money into their cars that can easily be replaced, than into their body’s which God only gave them one of. The way I look at it is this, I’d rather pay for a higer prices quality product now and grow old healthy, than go cheap and buy centrums or something and grow old on medication and surgery. Look for people like YOU!
Kassandra Bragg
This is the million dollar question that’s not so easily answered. That all depends on your philosophy and point of view.
I have heard many people say that only the people in the business are loyal customers because they’re part of the company – “normal folks” will jump from brand to brand.
That’s like saying the only loyal Christians are the ministers and priests because they’re part of the “organization” – you just can’t count on having people in the pews!
Wait a sec, don’t we need those people in the pews to put money in the offering? Just like don’t we need “just customers” to put money in the coffers of the business builders who depend on sales commissions, whether it’s a large or not-so-large heap?
I have heard people describe Sunrider products as the Mercedes Benz of nutritional products – pure, concentrated and really really good. However, not everyone wants to spend their money on a Benz. Some people are happy with the admittedly-inferior Toyoda they get down at Walmart or GNC. . .
I know multi-millionaires who admit that the products are great but won’t buy Sunrider because it’s “too expensive.” I know many, many yoga teachers of much lesser means who spend a large chunk of their monthly earnings on Sunrider because of the way the products affect their bodies and performance.
It’s all about perceptions and shared values. What’s your health worth to you? Are you willing to make it enough of a priority to pay for it?
Just some food for thought.
Cheers,
Rani
Sunrider Integral Health Solutions
I leave that up to the consumer. They are the ultimate in determining that decision. Oh, wait…I am a consumer too… well,
Is there an easy program to obtain product freedom?
I relatively look at the business expense first and foremost.
Even if it’s just $2 monthly to qualify… I’m sure people will buy what they want anyway.
It is all about referalls getting product freedom with me.
Brian Clinton
Anyone who says my candles are too expensive is just not the right customer for me!
If someone wants just any old cheap candle, they can go to the dollar store.
If someone wants a gourmet candle that is practically soot-free, has an incredible scent, smells just as good the entire time you burn the candle, is made from renewable wax sources (soy/vegetable wax)and is willing to pay what my candles are worth, then that person is a good customer for me. (And once people burn one of my candles, they don’t go back to the cheaper ones!!)
It is just a matter of finding a person who understands the value of your product. I don’t apologize for the price of my candles! They are worth every penny!
It’s all relative isn’t it. I have a brick and mortar business that I am working my way out of. Recently my window washer raised his price for doing my 5 windows 40%. I was a little miffed at the price increase so I figured I would do it myself. It took me 2 hours in between taking care of my customers and answering the phones to get the windows done. They looked horrible, I was sweaty and dirty and that was the last time I complained about price. My 2 hours was worth more than he charged me.
So rather than saying the products are overpriced promote the value of the products and the benefits.
It’s about perception.
If pricing was a concern when it came to automobiles we would all be driving econoboxes.
Charles Onuoha
Get free business building advice.
http://www.LeadersClub.com/32950/
MANY network marketing products are overpriced, and it’s another thing that contributes to some negativity surrounding our industry.
My first company was a service company and one thing I really liked is that the product was very competitively priced, so I never had price objections to overcome. But, I didn’t enjoy marketing something so un-exciting!
I moved on to nutritional products and while I love many of the products and still use a few, I found the price objections quite consistent. Are the products truly better? I don’t know, but I did find that without having a product that could actually be sold to an end consumer for a profit, it was hard to keep people in the business who didn’t want to be strictly “recruiting” focused.
Today, marketing a candle line that is competitively priced with a VERY large profit margin for the distributor, I have found a perfect fit.
I like being able to bring someone into the business and TRULY teach them how to earn their investment back plus a profit without any regard for recruiting others. It makes the business FUN and gets me out of bed every day, ready to share this product and opportunity with others.
Ultimately, it is up to the end consumer. I like that more end consumer are happy with the prices of this product and objections are few and far between!
EXPECT Success!
Jackie Ulmer
http://www.streetsmartwealth.com
Do we really want to offer cheap products anyway? All of these products are made better with less overhead. Can you imagine what they would cost if they were sold in the traditional way. Where would they be sold, Macy’s, Saks, Neiman Marcus, Bloomingdales, etc. You would never find these in Walmart or Publix. These products are for high end consumers. If they cannot afford to pay then why should I sell to that audience. I want people who can afford it. I specialize and I think that we all should. You get what you pay for.
When I get asked “what does it cost?” I tell people the price and some say great and some say too expensive….It really is all from the potential buyer’s point of view.
Also some companies have their own research and development laboratories – that’s why the products are often cutting-edge and many have in-house testing facilities. In the long run these overhead brick and mortar costs are what makes our products better than what is sold in Wal-Mart.
So I don’t worry about the costs – people don’t often make buying decisions based on cost or at least not on cost alone….
They want to know “what is it going to do for me?” and that’s where our “story” about what it did for us comes into the equation.
Lynn
http://growolderbetter.com
If we aren’t selling product, then we are a pyramid, pure and simple. The product must be salable, due either to decent price or incredible value. If your MLM company has neither, selling “the dream” only is not only unethical but illegal.
Good comments.
Some of our products are over-priced. I don’t agree with Roxanne that eliminating the employees is the answer to that, though. (No offense, Roxanne.) Network marketing, the entrepreneur thing, is not for everyone. Lots and lots of people need jobs, and always will. Network marketers should not be eliminating those jobs; if we did, who would be left to buy our products, besides each other? And I really don’t think that’s the idea. I think the idea is to be responsible members of our communities, supporting everything and everyone.
Personally, I’m appalled when I see someone check their own groceries, because it means one more person is not going to have a job available today.
bk
Other routes, ways and products, I tried. With my own experience and the type of genuine research by people like Dr. Lang, MD, I feel Value is primary in the equation, rather than price focus.
As others have expressed, I too am looking for those like me.
Before MLM (people, products and services), my choices seemed to have been reduced and limited to: the “funny farm” or the morgue…
But, after some years, presently in my 60s, I’m planning the next venture – which for now, is the June HooRahRah!
Carolyn
For price, certain customer view it differently. When customers look at my product, they always say “It’s too expensive.”. But they didnt realized that if they taken care properly, my product can last them 5 to 10 years. That’s a bargain compare to other similar product, and mine can improve health other dont. Like Shay said if they want cheap stuff, they can go to dollar store. Customers always have their own opinion on prices, they rather spends money on luxury,but they wont spends a little more on their health.
Well, like Kim say we should look for our “Harry” or “person who play tennis”.
How funny, this came up in conversation yesterday. This is how I handled it- my friend Tonya, told me that she takes Women’s One A Day, and isn’t that enough? I asked her if she feels any difference since starting the One a Day? She has not noticed any difference in the way that she feels. I pointed out to her that it is only expensive when you spend the money and see no results. So in reality, since I have felt a difference using my products, and she has had no difference using hers, her product is the “expensive” one, whereas mine is worth all the money I pay for it! Let’s look at it honestly- how much of the $5 you pay for a bottle of vitamins from the local grocery store is spent on research, quality ingredients, and testing of product batches compared to how much NM companies spend on these things for their products? The majority of the $5 for that bottle goes into advertising and packaging…..
I think it’s about the same price. And I agree with the what the doctor wrote, I think the quality is usually much better. Also, I think that often NM companies offer products which you cannot get in a store (and that’s a win-win!). And then don’t forget our awesome personal service….
Dan Shinn said…
I think price is very important for customers. If you are sponsoring, potential income is most important. I started out marketing communication services, long distance, pagers, cell phones, and other communication products. About 5 years ago my company moved from communication services to nutritional products. Everyone paid retail for the products. The products were great products and I had a lot of testimonies about how they helped. Three months ago my company moved from everyone paying retail to everyone paying wholesale without any enrollment fees. In the last three months I have been able to help three times more people then in the last three years. So price is important but the product must be guaranteed and meet the need of the customers.
Dan Shinn
http://www.shinn.biz
I Use Products From A MLM Company Everyday And I Do Not Do The Business.
Chris Varvaro