8.18.2006

Nutrition and Direct Selling

Direct Selling News -
MLMs Known for Quality & Research
While the direct marketing channel still suffers from image problems, network marketers may in fact offer some of the nutrition industry’s highest quality products. “In my experience, MLMs are among the most demanding customers on quality issues,” said Preston Zoller, President of Inverness Medical Nutritionals Group, which manufactures supplements for a range of private label and contract manufacturing customers. “Their products come with very high consumer expectations and must perform or won’t be repurchased. MLMs also tend to have large and knowledgeable quality staffs to oversee and enforce their requirements.”

MLMs may also fund more research than retail brands because they require a scientific foundation for the claims that sell their products. “The robust markups in the MLM channel are an important factor in being able to support the research and the quality that are built into MLM products,” said Zoller. “MLM brands often carry higher dosages of the more expensive ingredients because they are not subject to the same price-point pressures as retail brands. They are more likely to make cost efficacy trade-offs in favor of efficacy because their direct-selling model depends so heavily on repeat sales.” Pharmanex, for example, has more than 130 scientists in three labs in the U.S. and China and conducts around 10 human studies, 15 to 20 pre-clinical studies and 10 to 20 safety studies in a year, according to Carsten Smidt, Vice President of Global R&D.
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4 Comments:

Blogger insider said...

I did a post on this just this week on Amway/Quixtar R&D. Over 500 dedicated scientists and technicians! Would be interesting to see what the average company of the same size has.

The truth about amway and quixtar

August 19, 2006  
Blogger Dave Stone said...

Hello Insider,

Your post certainly details the committment and investment that Alticor has made in new product development. I agree with your question - I too wonder what resources the average company has dedicated to R&D. There are thousands of product development consultants in the marketplace today and many large manufacturers offering contract services to produce the goods.
Thanks for stopping by and weighing in on this topic.

Dave

August 19, 2006  
Anonymous Ty Tribble - MultiLeveler said...

Network Marketing companies have been known for remarkable products for a long time, however some have gotten greedy.

I can say with some authority that Quixtar's Double X is less than $10 to produce, yet the retail price is what, $80 now?

Quality is part of the remarkable product equation, the other part is a realistic price.

August 19, 2006  
Blogger Dave Stone said...

Here's another point to add to that Ty. From the link that Insider referred to:

"Over 500 dedicated scientists and technicians! Would be interesting to see what the average company of the same size has."

With so many people on staff, many with advanced degrees (higher salary demands), why have there been no "remarkable" products developed through all the R&D? Unless you consider XS, which may be good but hardly remarkable in terms of creating overwhelming market demand.

Dave

August 19, 2006  

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