Education on Direct Sales/Network Marketing/MLM based on facts & logic. I discovered early on that its not like what most people think it is. Direct Selling (Part 2) So lets look at some examples: How much does it cost to buy the latest pair of Nike shoes? Now ask yourself how much does it cost Nike to manufacture that same pair of shoes? Today it is estimated that a pair of Nike joggers would cost about $5 to manufacture and yet you pay well over $100 for them. Do you know why? To start with, think of all the distribution channels that a pair of Nike shoes needs to go through to get the shoes from the manufacturing floor to the retail outlet before they can be sold. There are international, national and regional distributors, transport costs and of course the profit margin of the retail outlet selling the shoes. Add to this the cost of advertising and marketing the brand name and its easy to see why we are paying over a $100 for a pair of Nike shoes. If we were to single out the marketing budget of Nike, how much do you think they spend sponsoring the likes of Tiger Woods, Maria Sharapova, LeBron James, Derek Jeter, Ronaldo and the Brazilian soccer team? The company wont say exactly what it pays for names like these, but obviously it isnt cheap. Tiger Woods, for example, is the worlds highest paid athlete, earning approximately $87 million a year (as of 2011). Why does a company like Nike pay so much for Woods? Simple, he has what it takes to be marketable. He is articulate, attractive, an excellent role model, clean-cut and scandal free. Essentially the perfect walking, talking billboard! Now add to this the cost of Nike TV commercials and roadside billboards, who do you think is paying for it all? Thats right, the end customer (or also known as us). To be continued.
Posted on: Thu, 07 Aug 2014 09:47:19 +0000
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