Wednesday, January 3, 2018

MLM Basics: Why MLM (almost) never have a price advantage

Ever notice that the products in MLM cost way more than equivalent products elsewhere?

doTerra essential oil... Intro kit is $27 for 15 mL of oil.

However, Amazon sells 10X the oil for slightly lower price, from a different vendor

Remember, 15 mL vs 160 mL of oil. doTerra is more than 10X more expensive. 

You can guess the doTerra reps will start yapping about how their stuff is Certified Therapeutic Grade Pure and nobody else compares. Actually, it's a term invented by doTerra themselves, and they certify themselves, it doesn't mean anything!

How about juices, you say?

A certain "cold-pressed juice MLM" wants to sell you juice for almost $12 per 12 oz bottle. That's about $0.97 per oz.

But you can find similar juices on Amazon, delivered to your door, for $0.42 or even lower per oz, also cold pressed, certified organic, and so on, from Suja, Evolution Fresh, Naked Juice, and more. Or you can buy a cold pressed juicer for $100 on Amazon and make the juices yourself with fresh vegetables at your table. Can't get any fresher than that, right?

I can go on and on, but it should be obvious. MLM prices are NOT competitive even if you just use Google or Amazon to do a little comparison shopping.

Have you ever wondered why?

The answer is simple: it needs to pay all those commissions.

MLM insiders, such as MLM attorneys, suggest a 500% to 700% markup from cost.
...Most MLM companies are likely to pay total commissions equal to between 30 and 45 percent of the price sold to distributors for resale, or prices for which consumers buy directly from the company. A typical company will try to achieve a minimum 5-7 times markup to allow for commissions, overhead and profit. Typical markup for resale by distributors is 25% of their purchase price...  
quoted from article written by MLM attorney Jeff Babener 

That's why MLM tends to be "lotions and potions"... They can claim "custom formulation" and those get used up so you need to buy more later.

But MLM will not be cost effective unless it has a truly unique product, and those are usually schtick-based with woo pseudo-science backings, such as "marine algae" or "(insert fancy fruit) juice" or such.

1 comment:

  1. It is insane, I have just checked what Amway Glister is made of... They add "briliant blue" color, most likely E132 or E133, both produced out of coal tar and being suspected to cause various negative effects including cancers... Go Diamond! :-)