Word of Mouth

Do you help businesses to grow? Yes you do and honestly in a big way.

Lets say during one of the conversation you mention about a restaurant “Sun and Sand” in your area. Now one of the weekends I happen to be there in your area with my family and I remember you talking about “Sun and Sand” restaurant. I go to the restaurant and liked the food very much. Well, I went to the restaurant because you told me about the great food and wonderful ambiance of the restaurant. But then who gets paid here,off course the restaurant owner.

Now natural tendency is, I start talking about the nice food I had,to my friends. I might even put up a photo as well on Facebook. Over a period of time, it might happen that 100 people visit restaurant due to this word of mouth publicity, initiated by you. That’s the power of word of mouth. We trust our friends, relatives more than anybody else isn’t it. Now when these 100 people dine at the restaurant who gets paid. Again off course, the restaurant owner.

This also works negatively. If a friend of yours talks about his bad experience with one of the doctors, would you ever visit that doctor? No way.

So you can imagine how powerful this concept is. If we take this powerful concept of word of mouth and combine it with ecommerce, how does that sound.This also removes all the intermediate agents like advertisers, stockists, wholesalers, retailers. This is also called as MAD (Marketing, Advertisement and Distribution) cost.

A Bisleri bottle costs around 10-20 Rupees. But do you know what is it’s manufacturing cost. It’s not more than 80 Paise. Now why there is such a huge price difference. Simply, because there is a huge chunk of cost consumed by stockists, wholesalers and retailers. There is a major chunk that goes to the advertisement featuring Sharukh Khan, who does not add any value to the water, but we all pay for his cost as well. True?

Now if you really see, companies spend a huge amount of money on MAD. Sometimes 70% of the product cost is attributed to this whole supply chain management. A Network Marketing company removes this whole supply chain management. This is the reason, company can provide products at quite reasonable rates and also share a good amount of revenue with you and me, who decide to act as face to the company.

Doesn’t it make sense to do, what we naturally do and also make money out of it?

By
Darshan Vartak

http://livethypassion.wordpress.com

Please feel free to reach me at darshanvartak@gmail.com

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