A story of why you pay more for the package than for the screws!
I haven’t been able to get this out of my mind for several days now so I have to share it with you.
The other day I needed two screws so I went to the hardware store. I found what I needed but only in a pre-packaged box. I only needed two at the right size and length.
Now I could have got the same screws from the bulk bin and bought them by the pound, but I only needed two. I picked up the package and took it to the checkout.
At the checkout, the girl said something to me that got me to thinking. She said, “This is over $2.00 a screw”. I looked at the price and she was right, it was over $2.00 a screw.
Now, I could have picked up the same screws from the bulk bin and bought several screws for the same price, but I only needed two screws, not a pound of screws.
So here I am paying $4.00 plus for 2 screws that probably only cost a fraction of a cent to manufacture even after all the machinery was in place.
So the screws are manufactured then sold in bulk to a supplier for a couple of cents per screw. The supplier then sells the same screws to a wholesaler for a couple more cents and the retailer then purchases them from the wholesaler.
But that’s not the end of the story.
How did it end up that I am purchasing 2 screws for over $4.00 a package?
When you trace the process of the screw, you have to remember this all takes place in bulk quantities. The manufacturer puts out thousands at a time and packages in bulk. He then sells in bulk to the sellers for his products and they in turn well to the store in case lots.
Except for the little packages that hold only two screws. Where did these come from?
These are the re-packers.
The suppliers sell the same screws in the same bulk quantities to another purchaser, not the retail store. They have a system whereby they take 2 screws out of the same case box they bought and put the screws in a little package they had made for them with their own name on.
They make a contract with a packaging manufacture to make little boxes for them to put the screws in and this adds another couple of cents to the cost of re-selling. But it gives them the opportunity to resell the same screws to the same retailer that the wholesaler does. But now the package is sold as if they are the supplier and contains two screws.
So let’s do the math. (This will not be accurate to the penny as we do not have the exact invoices to show, but it will give you an idea of the system that is used for this scenario). By the time the screws get to the customer, the cost of the screw may be anywhere from 4 to 5 cents a screw. Not even the retailer makes more than his share off the sale of the screw. He relies on bulk sales and expects to sell huge quantities.
However, the little box, which I purchased with the same 4 to 5 cents screw in it sells for over $4.00. Where did the mark-up come from?
So my purchase included 4 to 5 cents for the screws and I paid $4.00 for the box.
The majority of the profit from the purchase went to the re-packager.
So I have told this story to tell you the next story.
I have been studying Internet marketing for some time now and have come to the conclusion that where the money is, is in the packaging. There are many marketers who are doing essentially the same thing, but have their own brand on the products they sell.
They are all saying the same thing when it comes to how to do this business. Everyone has there own system and e-books that go with it and they have their own packaging.
It is in the packaging, or in Internet terms, the branding that determines the value. Who packages give the most value? Which brand gives the product the most value? How does the package add value to your particular product that you are sharing with others?
Nearly everyone is working with the same idea. You can’t patent an idea, but what you do patent is the method and the tools you use to promote that idea. The system you create to gain the results you are seeking is the tool, not the idea. I have seen that many have the same idea but use different systems to promote the idea in their own way, so that they can differentiate their product from someone else and call it their own.
Your branding is you packaging.
As affiliate marketers, your branding will become your re-packaging as long as you don’t tamper with the product inside and give great value to your content so that you are building up the value of the contents of the package.
Just like the screws I purchased, they were the quantity I wanted and the right size and length to do the job I needed them to do. So must the content of your package be the right system, the right advice to do the job you need to do and a top quality product from a reputable manufacturer.
So then we come to the cost.
We learned that the packaging has the most mark-up compared to the actual cost of the item. I look at branding to be the same way. Building your own brand or making a name for yourself is synonymous with who you are affiliated with. Your reputation will be dependent on whose product you are working with and so is the reputation of the product you are promoting associated with your brand so be sure and represent it with professionalism.
These are the possibilities I see. The repackaging of the product is where, not only the most mark-up is, but also where the most money can be made by the source of the new product line.
This is you and me. As affiliates of an online product and business partner, we purchase the product from the developer, but we stand the best chance to make to most money. This does not change the product, a screw is a screw; a nail is a nail. But as resellers through our own brand, web site, blog, e-mail campaign, and the like, I see no limit to possibility that anyone can do this.
This is why affiliate marketing has been set up and nearly every business that has products to sell, has set up this opportunity to others so that we will direct more people to them than they would ever find on their own. If it were not profitable, they wouldn’t do it. Smart people do smart things.
With as many people on the Internet such as Facebook, which is now the third largest country in the world, your market is limitless.
And no, I do not have a phenomenal success record to share with you. I have been struggling to get this thing working. But I would like some feedback to get your thoughts on the subject. And if you have some advice, I am always listening.
Leave a comment and let my know what you think.