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Network Marketing is Made for Today's Consumer
In business, it's all really very simple. Products are manufactured, purchased by a wholesaler and then purchased by an end user. Sure, the end user may in turn be a wholesaler again, but let's stick to the basics. What has become clear in the last ten to fifteen years is that the consumer, the end user, is exerting more and more power, driving costs down and making businesses adapt. Let's look at how the consumer economy works and show why Network Marketing is the ultimate economy for the consumer.
We begin by looking at Walmart. Suppose a product is bought by a consumer for $1. What happens to that $1 as it arrives in the cash register? The figure on the right shows how that dollar is typically spent. First of all, Walmart has to pay its suppliers, so 20% of the income goes back to the manufacturer, leaving $0.80. Walmart then spends $0.40 of that dollar on advertising, bringing in more consumers, who then visit stores. After paying $0.35 to $0.39 to operate and manage the stores, Walmart is left with a profit of anywhere between 1% and 5%. This is their bottom line.
The big winners are Walmart, and the consumer. Walmart wins because they can dominate markets, and this story has been played out in small-town America for decades. The consumer wins as well, since we are able to purchase products, often in bulk, at a discount. The losers are small businesses, mom and pop shops who can't compete.
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The next generation of business is Costco. Costco sells the same $1 of merchandise and pays their manufacturer the same 20 cents. Now, what's different about Costco is that they don't advertise. They have no marketing department. They rely on word of mouth and then use that margin in costs to pass on even greater savings to the consumer! This is how Costco is able to out-perform Sam's Club with fewer stores. There are no Costco ads. Just happy consumers, cases of paper towels and toilet paper in hand, passing the word to their friends. Notice how small business loses here as well, since they have to meet Costco's demands as well as advertize on their own to get you to come.
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Now, consider MLM businesses, specifically the business opportunity available through Midwestern Wellness. The same $1 of product is sold and it costs WIN the same 20 cents. Now, MLM has no advertising, but we also have no stores! Wellness International pays the distributors, who are the consumers, 62 cents of that dollar! 62 cents is paid back so that we then go out and market. The lack of advertising and stores keeps WIN's overhead low, and the consumers are well paid to keep purchasing.
When you ook at how the economy grows you can see the real power of Network Marketing. WIN is in the products business. Each time they add a new product, or a new service, the built in consumer base, desiring that 62 cents on the dollar, makes purchases. The MLM distributors can also grow the economy by introducing more people to the economy. Each time another consumer is brought in, either as a retail customer or as a distributor, the business grows. Each time another product is introduced, the business grows.
Note that small business wins here too! Do the manufacturers need to entice the distributors to buy? No! WIN already has done that with the compensation plan. The small business concentrates on delivering a quality product and a good price, and WIN's built-in consumer base will deliver the customers.
In the network marketing business economy of the future, everyone wins.
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