Consumable or Membership?

by Ket-Sang Tai

There are many MLM products out there but the most popular product type is consumable, like health drink, household products and cosmetic products. Another type of product is subscription or membership based products. There are pros and cons of both type of products. After doing lots of research and been involved in different types of products, I have come to a conclusion that membership type products are superior. Here are some of the reasons.

Uniqueness or Unique Selling Proposition(USP) of consumables

The USP of a consumable product is usually highest at launch. It may be a unique formula, a new technology or based on a new clinical trial result. No other company will have similar products. However, as time goes by, there will be more and more companies starting to produce similar products. These new products might not be the same, but in the eyes of consumers in the marketplace, they are, at least until they spend sometime studying it. It is a challenge to even get people to study it if there are dozens of similar products, claiming to be the best and latest. Of course companies can file patent but that only last for certain number of years and only offers limtied protection. Furthermore, 80% of consumers do not understand or care about patent when all the companies claim they have certain patents. Most companies struggle to keep their products’ USP for 5 years, not to say 10-20 years. The growth curve of the company will plateau when its USP decreases. Aren’t we here to built a residual to last 20-30 year or even more? You might argue that companies like Amway, Herbalife, Forever Living Products are doing well and many people are making money. However, you got to remember that most of these businesses were built 10-20 years ago. If you start building Amway today, you will struggle. Please prove me wrong if you can.

Value versus membership price

When we look at the value of a subcription based service or membership, you will find that it increases as time goes by. When a service is first launch, it is still at its early stage and the company will keep improving it throughout the years. In the case of educational membership sites, more and more content will be added on as years go by. The subscription fee often stays the same or only increases slightly due to inflation. Overall the value to cost ratio will go up over years. This will make it more attractive to the end users. Even if there are new companies starting to produce the same type of products, it will take time for them to improve the service or to add content, so they will always lack behind. Lets take a free information service for example. Do you think anyone can come up with a service better than Wikipedia? Any company can produce a website which looks better than Wiki and even easier to navigate. However, it will be near impossible to produce more content than Wiki because Wiki’s content has been accumulating over years!

Let look at more examples:

A new drug/medication can easily be better than an old one.
A new car can easily be better than an old one.
A new nutritional products can easily be better than an old one.

On the other hand:

A new video site will never be better than YouTube ( because of the number of videos they already have)
A new information website will never be better than Wiki

I hope this make sense to you. Once I realize this point, I will never go back to promoting a consumable again, at least not as a MLM product.

PS: I might be a bit biased as I am involved in a membership type MLM.

To Your Success,

Ket-Sang Tai

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  • Thanks Ket. You make some good points, especially now, when I in decision mode regarding what I want to promote.
    Jim

  • then if you take into account online business vs offline. If you want to build all online looks like one type would be easier to distribute and retain.

  • rubennila

    $$ hi i am an independent distributor herbalife
    greetings and thanks

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