About Products

We would like to comment about the product issue that has been coming up.

Contrary to the myth that Quixtar's products are all priced too high, the majority of the products are priced very competitively to national brands in their same category.

Most IBO's do not wish to market discount store quality products. That has never been our business model. In particular we find that the Artistry line is priced well and a very profitable line.

In addition to that, Quixtar has lowered the quantity of the Nutrilite Daily from 180 to 90, and lowered the price to make it even more competitive. They introduced the blister paks of Rhodiola and Carb Blocker also as part of their First Circle Program.

In September a new line called "Simply Nutrilite" is launching with exciting new health & fitness products with extremely good pricing.

In November some equally exciting Artistry skin care and cosmetics will be launched, also with great pricing.

And even more great news is that shipping will be free starting September 1st for all customer coreline purchases over $75.00. New IBO's, during their first full 3 months in the business, will also receive free shipping for coreline purchases over $75.00.

This is all a direct result of the IBOAI's  collaboration with Quixtar.

Comments

[MN Guy]

I hope everyone is taking advantage of the Free shipping for clients of orders of $75 or more. This has made a HUGE difference in our client volume. I regularly have 10-20 clients per month now, ordering online and most of them order over $75 to get the free shipping. It appears to me that Quixtar got it right by picking this $75 amount. Most clients don't have any problem creating an order of this amount. To be honest, I never spent nearly enough time in the past on the retail part of my business. My biggest hangup was I just really didn't want to run around and deliver orders, the time and gas money to deliver products usually made most clients purchases more of a pain than anything. But now, with the $75 free delivery, right to our clients door, I now am excited about creating as many clients as I can get. I think this is a great move by Quixtar and I really hope they make the free shipping permanent.

[Jason Brady]

Has anyone noticed that the B2B Program is being scaled back? The offerings are already limited, but as of July this year, nearly all the supplies that small business owners need will not be available through Quixtar.

I just started building my B2B retail business and receiving significant interest by prospects and fellow networking group members.

Now, I hear that many of the products are being discontinued. This will severely impact my ability to build a retail client base. The fact that many products are available through partner stores does not help, as the $75 free shipping, 180-day return guarantee, customer service and other benefits of directly ordering through a Quixtar IBO no longer apply. Small business owners don't want to deal with a large number of suppliers, and having to set up accounts at multiple partner stores is a huge disadvantage.

It's bad enough having to compete against Costco on price. If I can only offer small business owners a product line consisting of bath tissue and laundry detergent, why bother?

The small business market is huge. Costco alone sells tens of billions of dollars' worth of supplies to this market...why is Quixtar walking away from this opportunity?

[Moderator: We checked with the Corporation and this was the response we got, ""B2B hasn't had the volume for us to maintain the level of support we have given it over the years. There have been and are pockets of great interest and success but unfortunately to truly compete, this is a business that demands a large product offering and is price competitive and we have not been successful at supporting it at a level that can make an impact in the industry. When you combine this with our increased focus on our core businesses Health and Beauty, B2B support becomes less and less. "]

[AmKid642]

One thing to keep in mind is what THE product is. It is the opportunity. The main reason a lot of the volume is personal use is because we share the opportunity to be an owner with people. Given the choice between wholesale and retail, most people will buy wholesale. The reason we have products is this is a business, not some scam. We need products that people want and that they can afford. I believe that the company does that pretty well. The one product line that is problematic is Home Care. If we do our jobs though and educate clients on concentration, we will be able to move that line. It is becoming more difficult though, with other brands starting to get on the concentration band wagon. I think that they have done a wonderful job of finding "foot-in-the-door" products though (twist tubes, XS, bars, and now the water). These ultra-consumable products are all unbelievably competative in every aspect (price, quality, service) and they make it easier than ever before to begin the PROCESS of establishing a customer. I know that we would all like to have customers who buy everything from us from day one, or maybe that is just me. But if we do our job of educating them and finding out what their needs are, instead of our desires, and filling them, we will have loyal customers who are more profitable. The reason for not chasing the bargain basement shopper is not that they are stupid, it is that it is not really feasable in our model. The thinner the margin on your product, the more volume you need to do. There is an upper limit and a lower limit to what we can do. If I have to choose which limit to push, I want the upper limit. If you are not satisfied with the SUGGESTED pricing, lower your margin and sell more units.

[j4.1776]

we have plenty of products that come from partner stores to apease most individuals.

but over-priced is not a term that goes with quality.

for the same reason that if you were to purchase a bunch of trendy clothes, they are in and out of style, usually not all that expensive, and really do not have a high quality, but usually low-medium. just good enough to get you along a few passes of the laundry and then the new stuff comes out, tempting you to repurchase the less-quality/trendy stuff again.

as compared to:

purchasing a higher quality clothing, in which case stays in fashion, mostly because of its quality, last longer, looks nicer, cost a bit more, but really cost much less in the long run because you are not having to purchase as often, and contrary to popular belief, really IS affordable.

(not to mention that the sa8 would actually allow those "trendy" clothes to last longer too! ;D )

our core-line products are extremely affordable, have the same qualities as the later paragraph, and ... for all you greenies... are green. and as a matter-of-fact, have been green from the get go, before green was really a thing to think about, and all those others out there started puting those save-the-whales, go green, recycle, etc bumper-stickers on the back of thier antiquated, two-tone (rust and deep rust) vehicles emitting smoke so bad you had to turn your AC unit to recycle air because you were getting black-lung.

shew...ok...so i could and probably will get flamed for that, but i have never been one to be called a lier, but honest. ;)

alticor's family of products that are distributed through IBOs are very well priced and IF there was really another product on the shelves in the stores that was of similar qualities all the way from thier original thought and invention, to the assuries of the quality through production, and no short-cuts (at least that i have been able to uncover while at the facitilies), testing process, laboraties, permenant research/developement team, thier WALLS of patents (they got more patents on a wall then the general himself signed while in office) and most of all, still never having a late bonus check (speaking for myself) that has only grown over the years.

that, my friends, is totaly uncomparable! and if there are, and i am most assuridly will be nah-sayers to that, then they would hard-fetched to promote it at the prices we do, and still be profitable, and pay-out to folks like us!

this, is an awesome company and allows us that awesome quality of products that consumers and IBOs alike cannot get anywhere else.

*reaches for the fire-proof vest and swiftly secures it into place*

[William]

Yes, Amway products are not actually expensive, compared to the quality that we can get. I believe, quality means price, and Nutrilite products' price still reasonable.

[Richie]

I agree that we cannot compare prices of high quality exclusive products to lower quality products available in the retail stores.

However, products in any business are of one or more of the following categories:
1) products like wheat and corn that have very little differentiation from one seller to the other. These products have almost no pricing power. The sellers are "price takers". Any change in price compared to a competitor will cause their revenues to fall dramatically.
2) products sold by many competitors, but are differentiated. A great example is a car - Lexus and KIA are differentiated products sold by 2 companies. The competitors have pricing power based on the fact that products provide different value. However, important to note is that: toyota and honda, maxima and infiniti, bmw and mercedes, sell cars that are differentiated but provide almost the same value. Thus, between each of these pairs, the pricing power is limited. You will notice the pairs sell for almost similar prices.
3) oligopolies that sell products: example is chewing gum. Market share for chewing gum is shared by a very small no of companies. These companies have very high pricing power, and can raise their prices higher than inflation without worry of losing customers. The marketing that they do ensures that very few people want to pick an unknown brand of gum in their mouth for 5cents less.
4) monopolies that have the highest pricing power, but in US are regulated (in most cases) to ensure that consumers are protected.

Important thing to observe is as IBOs all the exclusive products we sell are in the (2) category. As a business owner, I want the highest possible price, but any higher than a competitor that "provides almost similar value" I will lose out in the competitive marketplace.

So, for products that we sell, in the Toyota-type category we need to be sure we do not price our products higher than the Hondas out there. And same, for products in the Lexus-type category.

Comparing our Lexus products to Walmart is irrational, but being ignorant about prices all together is not a wise option either.

I am glad that the board and the corporation has been realizing the same, and lower the prices to match the competitor products that provide similar value.

However, one thing to learn, like in any other business, this will put pressure on our profits over the long-run. This is the nature of free enterprise. High profits attract competition, and thus lowering profits until all the high profits are gone. This was observed by Adam Smith and he called it the work of the "invisible hand". Software Engineers in the U.S are learning this lesson that their salaries will get "pushed" down by other engineers providing similar services in other countries for 1/4th the cost. We, as business owners, have to accept the same too.

I am not saying complacency is the solution. One way to continue to maintain profits, is continuous innovation of new products. New products don't have competitors or very few competitors that provide similar value, and can demand higher profits (just like oligopolies in category (3) above). These profits over time will disappear and become like category (2) products, but the new products in the pipeline can fill the gap.

As a real example of case study, GM and Ford were in (3) category in the U.S. until the 70's. The executives at GM had phenomenal salaries and benefits being in such a unique position The global marketplace opened up. They were immediately down in the (2) category. However, compensation continued as if they in (3) category. The spirit of innovation died. And, we all know what happened from then.

We can learn from history, and communicate to the board:
The solution is not to be price uncompetitive (and keep talking about our products vs walmart), but to continually innovate.

The positive thing is that the corporation has learnt this lesson, and has been implementing this over the last few years by introducing new products on a continuing basis.

[The Board agrees. Moderator2]