Distributor's Opportunity

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You have arrived on this page because you have some interest in what the distributor opportunities might be for Vibrant Skin Repair Cream.

As of August 11, 2006, this page was updated with a new section HERE -- about how we expect to offer this new product through distributors.

There is available an exclusive representation for this skin and other of our products. This page gives you the background.

Many firms face the question of whether or not to use distributors to move their products to the consumers as opposed to making all sales from the corporate source -- even if that company has many branches for ease of delivery.

Vibrant Life has, for some 25 years, been an "information-rich" source of vital data as well as THE source of unique health formulas which handle the major causes of death on our planet. We watch, with sorrow, those firms who copy our formulas and cheapen them so that they do not work, or those who sell at such discounted prices that they cannot afford to give the quality of service which truly serves the interests of the consumer.

We do NOT sell what the consumer WANTS, but what we believe it is that the consumer NEEDS. The difference there is what divides many marketing approaches from one another.

Generally the WalMarts and CostCos of this world do not even try to give personal information on vital subjects like skin care, heart disease, cancer or other concerns. These discount merchandisers take a "free ride" on the work done by the information-rich sources, like ourselves; sometimes the consumer LEARNS about the product only to go to the cheap store to BUY.

I have published a great deal of the information that applies to this subject on other web sites I own. I offer you the opportunity to visit some of those references, with brief quotes from them here:

What RUINS The Health Food Store?

There is probably no part of human existence more prone to the supply of false and misleading data than that related to "health."

Arrayed on one side is the vast panoply of the medical establishment, pharmaceutical companies, government, media and others who believe in "better living through chemistry."

On the other side are the tiny "David's" who face Goliath, from a position of raw material producers who generally have no interest in the health value of what they produce to the "health food stores" which are usually owned by individuals dedicated to changing the very nature of health care.

The marvel of this struggle is that the many trillions of dollars of assets on one side are still not enough to squelch the tiny David's who suffer even from plenty of opportunism from within their own ranks. (Source -- pop up window for another Karl Loren site)

Opportunism?

You've seen it yourself.

Even the "official" FDA report of the health food store industry recognizes the bane of the "free rider," the person who takes your free information and goes to WalMart to buy, or the customer who lives near your store, gets interested because of some promotion you put out, but goes 5 miles to save $2.00 at Costco.

Here is a quote from the official FDA report on the supplement industry -- if you have not read this, follow the link at the end of the paragraph for the full report -- many pages.

Natural and health food stores commanded $4.5 billion in DS sales in 1997 for an overall market share of 35 percent (see Table 5-5). Sales increased 55 percent from 1996 to 1997, making natural food stores the fastest growing DS distribution channel. Sales of herbal and botanical products are more concentrated in natural food stores and multilevel marketing firms than in the overall supplement category with 37 percent and 38 percent, respectively, of the herbal and botanical market (see Table 5-6).

Of the natural food stores, General Nutrition Centers (GNC) stands out with $1.2 billion in sales in 1996, or 20 percent of the $6.2 billion retail market for supplements (Nutrition Business International, October/November 1997d). Large natural food store companies, such as GNC, produce their own products and may manufacture private-label products for supermarkets and drugstores as well. Other natural food stores carry both national brands and private label brands manufactured by other companies. (Source on another Karl Loren web site, in a pop-up window.)

The industry was also covered in a report similar to the FDA report quoted above.

That report makes it clear that health food stores are constantly looking for "new products" in order to avoid the price competition that produces discounts that make it impossible to provide high quality educational service to the customer. Here is MY quote from the introduction to that report:

The search has been and will be for products that are new and are therefore NOT being sold by others and particularly NOT being sold at discounts that make it impossible to pay for skilled sales staff and training.

The "newest" product must now be sold as the "best" product because, in truth, the discounters don't have it yet.

Vibrant Life has been selling the same formula for more than 20 years and has many customers who have been buying that same product for 15+ years.

Vibrant Life products are NOT new, they are NOT different other than in the ingredients (which anyone could copy) and are definitely NOT discounted. The "secret" for Vibrant Life has been the "service" provided by more than 100,000 pages of research and information that IS unique and remains cutting edge through continuous new research and publication.

The "different" product is often just as good as the "new" product, and both of them are often no better than the old product!

But NONE of them, when sold at discount, have anything new or different about them. MLM works mostly because it HAS TO BE DIFFERENT because it is always more expensive than the health food store would sell the same thing for. (Source for this quote and the outline of the entire professional report on the health food industry -- another Karl Loren web site -- pop-up window.)

Another problem facing the health food industry is the constant encroachment by the drug companies, selling "vitamins" for which they have managed to get a "drug claim," FDA approval and thus a monopoly on their "invention." These products push the very low-profit vitamin items off the shelves without the massive marketing dollars available to a monopoly marketer with FDA approval to make drug-like claims.

Medi-Cell Laboratories' Age Lift Series anti-aging products part of company's Hydrox-C line

Drug & Cosmetic Industry, September, 1998

00-00-0000 The new Age Lift Series of anti-aging products, by Medi-Cell Laboratories, is part of their Hydrox-C line of advanced skin care. The Rapid Restoration Patch is a quick-release, non-adhesive, dermal transfer patch for the area around the eyes, upper lip and smile ...

Medi-Cell Laboratories, Inc. is the first and only company to combine three different types of Vitamin C with Alpha Hydroxy Acid in non-irritating formulations.

Karl Note: The full text here requires a premium membership to access. Presumably this substance is classified as a "drug" and is apparently transdermal.

It appears that "drug companies" could and would research "vitamins" which would not be eligible for patents if marketed under the DHSEA but they would rather do enough research on the to allow them to be classified as "drugs" and get the patent that gives them the monopoly. It is very likely that a "substance" such as MSM with Vitamin C, in a cream form, could do much of what this drug might do -- but be covered under the DHSEA.

It is a "catch 22!" If you spend the money to get a substance classified as a "drug" you can make the claims for affecting function or structure. If you prefer to market the SAME product as a "non-drug," under the DHSEA, you could easily get into trouble making the same claims. In fact you would have to find ways to market without making health claims. (Source -- another page on this web site)

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Natural product people are fighting back with "vitamins" that "act like drugs" and can, even so, avoid FDA labeling requirements.

VitaMan ® Give Me Strength!
A Drug-Free Alternative to Viagra ® by Pfizer

VitaMan ® has been fortified with several new ingredients and with greater strength to meet the needs of today's active man. Research into vitamin supplementation with certain vitamins and minerals has shown a direct benefit in helping to restore energy levels and eliminate any "Marginal Nutrient Deficiency" which may be affecting his ability to generate his maximum personal peak of performance in work, sports or sex.

You may wish to choose VitaMan ® as a readily available drug-free alternative to Viagra ® by Pfizer for prescription-only treatment of erectile dysfunction, if your problem stems from the simpler and more common "Marginal Nutrient Deficiency" experienced from time-to-time by large segments of the male population. (source -- another page on this web site -- with more examples.)

Whatever happened to plain 'ole honest selling of basic supplements that took care of most of what ails man, but does not get covered by insurance and drugs?

There is another factor that ruins the day of the typical health food store owner. His profit margin is too low to allow expansion of his sales. Generally it is a "labor of love" by a few owners and/or staff who are more interested in serving their community than going to Palm Springs for monthly restort vacations.

That "official" FDA report quotes external sources for data which they, themselves, probably felt it was not appropriate to gather -0- such as the profit margins realized in various distribution channels for vitamins and other products. Here is a quote from that source that shows the profit margin for dietary suppliements are typically 40%.

Depending on how you figure, if a store buys a product at $60 wholesale, sells it at $100, the difference of $40 is a profit of 40% of the selling price. It also happens to be 67% of the wholesale purchase price. This may seem attractive, but very few businesses actually prosper with profit margins that low, particularly when the item requires for high quality and quantity of service from the seller to the consumer.

The attention given to expanding product offerings, educating consumers, and giving supplements prominent store location is not a surprise considering the large profits food stores make on DS products. The profit margin for most products in food stores ranges from 1 to 3 percent. Dietary supplements, however, yield profit margins near 40 percent (Gaseau, 1995). A buyer from a large East Coast supermarket chain said that pricing is not an issue and that food stores can "...price [supplements] competitively and make a ton of money" (Gaseau, 1995). (Source, another Karl Loren web site, in a pop-up window.)

It's important to remember that gross profit margins can vary drastically from business to business and from industry to industry. For instance, the airline industry has a gross margin of about 5%, while the software industry has a gross margin of about 90%. (source)

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The typical health food store stuggles to get higher margins and lower expenses -- to keep up with the encroaching discounters.

One way many health food stores try to compete is by introducing new products on a constant basis. These are often products that may look good, but after a month of low sales, the store has to dump the left-over merchandise. Vibrant Skin Care products have solved this totally -- if they don't sell, don't pay for them!

Another approach to the "new product" idea is to turn more and more to the Ayurvedic products that are gaining popularity in the US -- and which do not lend themselves well to the mass-merchandising of the discounters. For instance, click here to read a batch of Google News Items on the word "Ayurvedic."

But the biggest problem for the health food store is still the "free rider" who goes to their store to learn and then goes to Walmart to buy!

The concept of a "free rider" was also covered in a report from a distinguished legal scholar on "retail price maintenance" being legal when done correctly:

If consumers value retail service such that better service raises consumer demand, should we not expect retailers to provide adequate retail service without being nudged by the manufacturer? The answer is “no” where one retailer’s service invites a competing retailer to become a free rider. A free rider is someone who enjoys the benefits of someone else’s investment without having to pay compensation.

The solution, according to this published article in a law review, is a "retail price maintenance" agreement which provides this benefit:

That is, by selling its brand to retailers on the condition that each retailer’s price not fall below some minimum level, the manufacturer prevents any retailer from taking sales away from another by charging a lower price. Also, by exerting control over the retail price of its brand, as well as the wholesale price, the manufacturer can affect the amount of retail service by providing the necessary retail “margin” to pay for it. With retail price competition for the product thwarted, once retail prices settle to the minimum level specified in the RPM agreement, retailers compete with each other for sales by offering valuable retail service to consumers.

Obviously, a product whose quality is low cannot survive long in the marketplace just because it carries a high retail price and appears in reputable retail stores. An RPM policy does not enable a manufacturer to make a silk purse out of a sow’s ear.

An economist measures consumer welfare as the difference between the most consumers would pay for a product, rather than do without it, and the product’s price. By this definition, any reduction in a product’s price, other things remaining unchanged, adds to consumer welfare. Similarly, higher quality and easier availability, at the same price, add to consumer welfare. To monetize the value of higher quality or easier availability, an economist calculates the price reduction on the unenhanced product that would be necessary to make the consumer indifferent to getting the enhanced product at the original price.

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Assigning dealers to exclusive geographic territories is another vertical arrangement some manufacturers use to curtail free riding and assure downstream service. Exclusive territory agreements prevent a dealer in one territory from undercutting the prices of a dealer in a nearby territory.

The decision by the Supreme Court that accomplished this move was Continental T.V., Inc. et al. v. GTE Sylvania, Inc., 433 U.S. 36 (1977). (Source, on another Karl Loren web site, these quotes and much more -- pop up window.)

If you are interested in the Distributor Opportunity with Vibrant Skin Care products, you should be interested in how to solve the "free rider" problem.

We have that way.

We offer any interested person the opportunity to prove his eligibility for emphasizing service not discounts, for the resale of our products at prices that do not fall below the published prices we offer for the same products on these web pages.

Here is the new section mentioned at the top of the page, with the date reference August 11, 2006.

The technique we MIGHT use (there could be others) is the Consignment Sale. I use the above paragraphs in blue, plus the other material in that same article as the legal and philosophical underpinning to our consignment sales model. (Click here for a brief restatement of that position)

The original marketing plan I had, using Consignment Sales (much further below).

I now have a different plan -- looking for the right approach to using Distributors such as health food stores.

We have long had the Company Policy that there are standard discounts for quantity purchases:

Buy one bottle (jar, etc.) at the published retail
Buy 4 jars, same product, same time, for 25% discount
Buy 8 jars for 30% discount -- all the same product
Buy 24 jars for 35% discount -- all same date
Buy 60 jars for 40% discount == all of these pay with order.

That has been our standard offer for many years on most of our products -- exceptions to this price policy occur where we have offered more extensive or more detailed discount terms, such as for MSM bulk or one-KG bags.

In addition to this Company Policy we have the additional feature that a person can buy one bottle, pay the regular retail price, and then anytime within 30 days, get three more and receive the "retroactive discount" on a purchase of four bottles as though purchased at one time.

In other words, buy one at retail -- $50 for example. Then, buy three more within 30 days. The four bottles would then cost $150 (the four-bottle price with the 25% discount). Since she has already paid for one at $50, the next three bottles cost only $100.

This allows us to collect for the regular price when only one bottle is purchased, but allows the customer to get the advantage of the four-bottle discount if she buys those four bottles within one 30 day period.

We will extend that same offer to a "distributor." That means that a store or distributor can buy a minimum of 12 bottles (earning the 30% discount) and pay for that first purchase at the 30% discount price.

Then, when that store buys 12 more bottles (or jars) they would have purchased 24 bottles, in total, and they get those 24 bottles at the 35% discount.

As an example, use the $50 price for Life Glow Plus. Twelve bottles at $50 would be $600 -- less the discount on the first case -- 30% -- or $420, plus shipping, payment in advance.

The second case of 12 bottles would bring the accumulated total to 24 bottles -- earning 35% discount. So THIS 12 bottles would be figured this way:

1. First 12 bottles, 30% discount, $420 paid for 12 bottles, paid with the order, no credit terms on this offer. Shipping is extra.

2. Second 12 bottles, now means 24 accumulated total, so the price for 24 would be $780. Since 420 has already been paid, this second order of 12 bottles would be only $360 more.

3. Another order for 12 bottles does not bring the accumulated total into a different discount bracket, so the price for this third case would be at the 35% discount, or $390. Return To Top

4. The fourth order, one case, still is within the same discount bracket -- 35% -- so this fourth case costs $390 also.

5. But, the FIFTH order, 12 bottles, brings the accumulated total up to SIXTY bottles, eligible for the 40% discount -- RETROACTIVELY! The 40% discount would be $360 per case.

6. But this person has now purchased 60 bottles and has paid a total of :

1st order $420

2nd order $360

3rd order $390

4th order $390

Total Paid $1,560

Cost if all 60 purchased at one time: $1,800

So, this fifth case of 12 bottles cost $240 more

And, from now on every case sells for $360 for the 12 bottles.

This discount based on accumulative purchases must be made within any 180 consecutive day period.

No open account terms -- only payment by credit card or check with the order. Return To Top

A declined credit card or bounced check means that this whole deal is cancelled -- no further sales made until the person "goes back up" the schedule as described here.

In other words, sell at lower than our published prices for the quantity sold or failing to pay in advance means we won't sell again until we make a fresh start with written pledges about the "resale maintenance agreement" and no bounced payments.

That is the new model designed for health food stores and distributors -- in fairness it must also be offered to any person with the understanding and agreement that these items may not be resold at any price lower than the standard discounts available to anyone who reads the public pages by Karl Loren.

The further data below can be incorporated into the above business model -- read and see what appeals to you if you are interested in representing this product or selling it to others.

Consignment Sale

Here is some legal language from the State of California, Franchise Tax Board -- the Sales Tax People:

I sell items placed with me on consignment.When is my consignment sale considered a retail sale?

You are responsible for obtaining a seller ’s permit and paying the sales tax due on a consignment sale you make for someone else when you

•Have possession or control of the item you are selling,and
•Can transfer ownership or use of the item to the buyer without further action on the part of the owner.

In the case of Vibrant Skin Repair cream, you meet the above two criteria.

Vibrant Life is the owner of the merchandise, ships it to you (on consignment) without your making a payment. You have physical possession of the merchandise, but since you do not own it, legally, the owner, Vibrant Life, can instruct you, the agent, as to the terms of sale, including the retail price.

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Your instructions allow you to sell the merchandise to anyone, at any price, with the minimum allowed price being set forth in the agreement.

Thus, when we ship you goods on consignment, you would sell them within the terms of our agreement with you -- you would make the retail sale and would charge the customer and pay the State any sales tax due to the state where the sale takes place.

The laws that govern "consignment sales" would generally be state laws. My own research suggests that all states follow the general rules described for the State of California.

Thus, you do not pay in advance for goods we ship to you -- you get them "on consignment" and we set the price.

If you violate the agreement and sell at a price lower than the agreement, our remedy is simply to refuse to sell to you again.

Here is one more factor:

I place items with retailers on consignment. Do I need a seller ’s permit?

Yes.You generally need to obtain a seller ’s permit even if you make all of your sales by placing items with consignment shops, auction houses, art galleries, antique dealers, or similar businesses that make sales on your behalf.

Vibrant Life has a valid seller's permit to whatever extent that is required by California or Federal Law.

An exclusive agency agreement, to receive goods for which you do not make advance payment should seem like an attractive arrangement for the distributor.

You can add to that the feature that there is no restriction, or comment, on what other goods the agent may represent or sell. He can sell whatever type of goods he wishes, whether they are consider "competitive" or not.

He pays the agreed amount of money when he sells the product. If he sells and receives a bad check or bounced credit card in return, that failure is for HIS account and whether he ultimately got the money or not, he still pays.

He pays the shipping on items he receives, when he makes the payments for good sold. If he wants to return goods, he pays for the return shipping.

If he wants to quit the distributorship, he only needs to return any unsold goods, any money owed and inform Vibrant Skin that he has made that decision.

The Elements of a Price Discrimination Claim

Certain elements must be present to support a price discrimination claim under the Robinson-Patman Act. If any of these elements is missing, then no violation will be found.

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First, the seller must have engaged in discriminatory pricing–that is, offering a better price for the purchase of goods to a favored customer than to another customer. A seller cannot avoid liability by offering the same price to everyone while offering some customers an advantage such as more generous coop advertising allowances or free shipping if the additional terms result in a lower effective price to the customer. Similarly, discriminatory pricing may be found if the publisher offers better credit terms to two purchasers who are equally creditworthy.

Second, the transaction must have been a sale of goods. If the transaction is a bona fide consignment rather than a sale, then the Robinson-Patman Act does not apply. Thus, for example, the publisher is free to offer different terms to various wholesalers or distributors that take the publisher’s stock on consignment rather than purchasing the books for resale. (Source)

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There is a customized web site available for each exclusive distributor, such as the one HERE. Far beyond this being a mere web site, it is connected to a professional shopping cart service that can be used by the distributor selling any of our products, resulting in a prompt and automatic deposit into the bank account of his choice of the amount due him on the consignment sale.

There is also available a sophisticated ListManagerPro service with witch he can send out approved bulk eMails, handle incoming personal messages from his prospects and keep them separate from the names of any other person or firm.

You don't have to have your own shopping cart, credit card processing or list manager service -- when you become an exclusive representative for one or more of our products.

ELECTRONIC TRAINING COURSES

There is ELECTRONIC TRAINING COURSES available for not only the staff of the distributor but also any of the customers or prospects of the distributor. Commission rates for consignment sales are increased on the basis of the number of such educational courses which are completed.

There is an example of one of these courses HERE that you can explore and take at no cost. There can be thousands of courses like the ones you will see here -- courses which you or your staff or your customers can take -- either free, for "points" which you can handle, or for money fees. These are unique learning programs written by Karl Loren.

These pages are Copyright © 2006 by Karl Loren, All Rights Reserved