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Two ways to tell if your products are overpriced

Many people think MLM products are overpriced. Many of the reps do, too. Here’s how to tell if YOU think your products are overpriced for regular customers:

1. You offer them to customers at your cost, or “wholesale” (sometimes letting the person know you’ll forgo any retail profit to make the sale).

2. You tell the prospective customer to become a distributor – so they get ‘the best’ price.

If you do #1, you make little or no money.

If you do #2, you chase off all the people who would buy – if they could be just a customer (that includes reps from other companies).

I know for some of you this is ok, because you’ve decided you just want to be a wholesale customer now, not a sales person anymore.

But this won’t do if you want to make some money building up a regular customer base, will it?


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.

About the author

Kim Klaver

9 Comments

  • Hi Kim,
    A suggestion I heard years ago still rings pretty true today. Be your own best customer. Meaning buy from your own store at full MSRP and put the money in your business checking account. It does two things: 1. It gets your head used to the retail price and 2. It builds up your cash flow for marketing expenses.

    Price is a function of preceived value.

    Retail or wholesale,
    Tom Doiron

  • Kim,

    You topic enters the realm of one of my strongest pet peeves in regards to the way network marketing companies operate. That being building an organization based on self-consumption.

    I would really question the value of any product if the consumer was not willing to pay a retail price for it without being offered options 1 or 2.

    What would happen to our favorite franchise stores such as McDonalds, Wendys, Chic-Fil-A, Pizza Hut tomorrow if they started using options 1 or 2 to grow their enterprises?

    Cheers!

  • If I were in a company where I had to make a choice between #1 and #2, I would choose #1. Sometimes people want to try a product. If you can’t sell it to them at a reasonable price so they can check it out, they won’t come back.

    If your company doesn’t allow you to sell your products at a reasonable price, you have a decision to make.

    Either stay a customer of that company and go elsewhere to make your money (JOB, another NM company, etc…)

    Or stay where you are and realize what your situation is. As long as you are ok with knowing what you’re up against, that’s fine. Make sure you let everyone that you sponsor know what they are also up against. It’s a long, hard road.

    Can it be done? Sure, however, you will have it a lot harder than some have it.

    If your company is structured where you have to sign people up to get the “good” prices, your business model is recruit, recruit, recruit. This doesn’t work well for those of us who like to find customers for our products.

    ~Roxanne~

  • I like Tom’s suggestion. I never thought of that!

    I have observed that some people have difficulty asking for the retail price no matter what industry they are involved with whether it be real estate, expensive clothing, etc. and others do not.

    I’ve had people say it was difficult for them to ask others to pay them for anything….. they’d rather give it away.

    Maybe a this is just personality and for some a discount makes them feel better? I just wonder….

  • How in God’s name could anyone sell a product which they think is too expensive? I thought the whole objective of KK’s teaching is to use your own hot-button. If you don’t believe that your product is worth its cost, find something that you can get passionate about, and promote that. First rule of success in sales. Customers are not stupid, if you don’t love what you do, they’ll walk away.

  • I actually recruited a guy once because he was **shocked” that a NM company was offering something that was actually cheaper than what he could get elsewhere.

    I had tried for many months to recruit him (he had been in NM before) but it wasn’t until I ran a financial analysis for him and he saw where we were demonstrably saving him money on a service he was already using from a traditional seller that he decided to get in.

    However by the time he got in I had switched to another company, but still it was comparably priced to the traditional retailers and he had no problems.

    He was also shocked I got paid nothing for recruiting him.

    Michael
    triplem@nym.hush.com

  • It seems to me that if someone is offering their products as you stated in the example, they probably don’t believe they offer the best products at the best price. If they don’t believe, then here are some of the choices they have: get some product knowledge training, get some sales training; find another product you believe is the best value; just be a customer; maybe selling is not for you.
    If you truly don’t believe you are offering the best product at a fair price, I doubt if you will have much success.

    thepetfoodguyl.com

  • Kim,

    There are few reasons why the customers think that NM products are over price

    1) Only NM,the customer know the cost price, which is the retail price minus maximum payout. Mcdonald will not tell you the cost price, you only know retail price.

    2) The higher the payout, the consumer perceive the cost of production is very low. If the maximum payout for a company is 60% compare to a company a max payout is 40%, then most customer make to believe the higher payout company has to mark up the prce to pay the distributor.

    3) Some of the network marketing company tell the consumer they can get a lower price product from them compare to other retail store. The idea that they can buy from NM company at a wholesales price give people the impression of getting the product cheaper.

    4) Most of the time, there is no concrete evidence that NM company are using a superior material for the products. They do not have proof so it is over price.

    Price is related to perceived value and urgency of wanting the product to satisfy the need.

    A bottle of water price at 1 dollar may be quite expensive to people, but if in the middle of desert, the same bottle may price at 1000 dollars, is really cheap to the customer.

    The challenge is the customer love to do some research but may only get partial information and as a result it is not a fair comparision.

    If one evaluate a buying decision purely on logic, then there is no sales.

    People buy emotionally, justified logically.

    If they do not see this product how can help them, feel the effect of that product working on them, then there is no sales

    If buying is pain (overprice) then it is impossible to close that sales

    If not buying is pain, it is time to collect the order

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