Thinking of using MLM to distribute my High Price Product. Advice needed.

Discussion in 'Network/Multi-level Marketing' started by tonym65, Aug 10, 2009.

  1. tonym65

    tonym65 New Member

    Hi Guys,

    I need a bit of help if at all possible. I run a company in Europe and we're currently developing a new product that will sell here for between ?‚¬1800 and ?‚¬2500.

    Unfortunately for us, this recession has hit us hard and our cash reserves have been depleted. We've been working on the product for about 4 years and find ourselves in the unsatisfactory position of having less resources for sales and marketing than we originally expected. We've spoken to our bank about getting working capital, but our bank, and most others here, simply won't lend unless they can see that their risk is rock solid.

    In discussions with a possible distributor in the UK, when we explained our problem, it was suggested that we look at network marketing to take the product to market. Now, I know enough about MLM to understand that it works best with a repeat sale on a regular basis. My company's product is a one off sale, with a couple of replacement parts every 4 or 5 years. We'll never get a repeat sale (the lifetime of the product is about 20 years - probably not too clever on our part) and the replacement parts we went with are industry standard so we won't necessarily get sales from those.

    Here's my question. Are any of you aware of a network marketing company selling a once off product with an effective retail price of around 2k? If so, can anyone tell me - honestly - how this company (or companies) is doing in the current economic climate? Are sales down? Are new distributorships up or down?

    We've considered that the commissions on our product available to a distributor base would be quite significant - like any product, our base price leaves us with a lot of profit for distributors and retailers, as we expected to market through "normal" channels (wholesale and retail) with the resulting discounts offered in the trade.

    I'm not sure our product would be attractive to networkers, but that's not my concern at present. I simply need to know if anyone is distributing a "big-ticket item" like this through a network and how well (or not) they're doing at the moment.

    I'm sure you'll appreciate that I can't reveal what our product is at this time. Thanks in advance for any help you can offer.

    Tony
     
  2. BobFirestone

    BobFirestone New Member

    Tony,

    It does not sound to me like your company would really benefit from a MLM distribution model. Your product is expensive and the customer only needs to buy once.
    In the past there have been companies selling things like home water filter systems, and they have had some short term success before going out of business.
    The attraction to MLM is residual income and residual income comes from repeat sales.

    With out revealing too much about the product, I have a question. Is the product something that is sold to businesses or individuals?
     
  3. mountainmom5

    mountainmom5 Gold Member

    tonym65: Here's my question. Are any of you aware of a network marketing company selling a once off product with an effective retail price of around 2k? If so, can anyone tell me - honestly - how this company (or companies) is doing in the current economic climate? Are sales down? Are new distributorships up or down?
    Yup.

    I was in a travel network marketing biz which had a $2000 to $11,000 product and I got out of it for several reasons, and have found out recently that a lot of folks that were doing really well with it several years ago are not doing much of anything with it now...
     

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