What's All the Talk About in Nikken?

What's All the Talk About in Nikken?There has been a lot of talk in Nikken in the past year, and especially in the past few months, about the shift in focus from recruiting new distributors to selling the products to retail customers. Is it really that big of a deal? I’ll let you decide.
I talked about the changes in a post that I published two weeks ago and, thanks to the distributor friend I mention in that post, Gary, I have been getting some notice from our common upline and from some people at Nikken corporate as well. You can read that post about the change in focus here. I’m still waiting to see what comes from all of that attention and it should be an interesting story.

Is the Change a Big Deal?

For some, it does appear to be a big deal. There are high level distributors who left the business to pursue other opportunities. That always happens when there are big changes in a business. Other distributors at the top promote it like it’s some radical brand new concept that will change everything for the better. That’s your biggest job when you’re at the top, to get everyone on board with what’s going on so that everyone can be successful with it. The particular person I’m referring to has a promoter personality-type and he does a great job at what he does.
I’m an analytical type though and I don’t trust hype. I need to know what’s behind it. Has anything really changed? In my opinion, no not really, but I’ve always focused on retail sales.

Are Retail Customers a New Focus for Nikken?

No, they are not. At least not from my perspective based on the compensation plan.
As I said, I’m an analytical person so let’s look at the numbers. Before the changes in November, the PiMag Waterfall water filter had a retail price of $385, a wholesale price of $308 (80% of retail), 308 PV and 292.60 CV (76% of retail). I am a Silver and get 20% commission. When I sold a Waterfall at my current rank I earned $77 in retail profit (retail price – wholesale price). I also earned $58.52 in commission (20% of the CV). Finally, I earned 308 PV toward qualifying for the month.
I have an Executive ranked person on my team who earns 10% commission. When he sold a Waterfall he kept the retail profit all to himself. He also earned 10% of the CV. All I made on his sale was my commission less his commission, $29.26 (20% – 10% = 10%; 10% of 292.60 = $29.26).
I also have a brand new person, a Direct. She only gets retail profit because a Direct’s commission is 0%. If she were around before the change and sold a Waterfall, she would have kept the retail profit and I would have earned the entire 20% commission, so I would have make $58.52 on her sale.
What I want you to see here is that before all of the changes, the biggest piece of any sale that I could earn was the retail profit. The biggest reward has always been for selling product directly to retail customers. When you add in the fact that as a Silver I don’t have to share the commission when I sell directly to a customer myself it is even better. Anyone on my team does have to share their commissions with me until they reach Silver, at which point I will receive 6% of the CV as an override that doesn’t affect their commission at all.
After the change, the prices are all lower. The Waterfall is now only $249. The wholesale price is still 80% of the retail price leaving a 20% retail profit. You still get the same reward for selling product directly to customer as you did before. The change is for upline distributors because the CV percentage has decreased. The CV on the PiMag Waterfall is now only 64% of the retail price while before it was 76%. So now, the commission income is even smaller than it was before.
The point is that, both before and after the change, retail profit is the biggest source of income in Nikken. That hasn’t changed.

So What Has Really Changed?

The real change is in the mindset. They want people to start selling the product to customers, like some of us have been doing all along. To do that, Nikken has taken away some of the award for building a team to skew the compensation plan even farther toward retailing. They have also lowered the prices to make it more appealing to customers and easier for distributors to sell. I never had a problem selling the product before, and now it is even easier.
There are several reasons for the change. One is that regulators want to see at least 51% of network marketing product sales to go to customers or they may label the company a pyramid scheme and shut them down. An even better reason is that distributors can make a lot more money if they are selling product to customers at retail than by signing up a distributor and making a small commission on a wholesale purchase. More people become aware of the product when we sell to customers who then tell other people, which generates more revenue for both the company and the distributors. When new distributors join the business and start making money immediately they tend to stick with the business a lot longer. Regardless of what the regulators say, it just makes sense to put more attention on customers.
Don’t get me wrong, building a team is still important. As an upline person, I want to have a team because even a small team of four people can reach more people and sell more product than one person can by themselves, and I still make some income from my team. If I was a new person I would want to sign up three distributors and move up in rank to Silver as quick as I could to max out my commission. The commission may be smaller now but it still increases my income.
Nikken wants everyone to put more attention on retail customers because it increases income for everyone, whether you are a brand new distributor, a seasoned veteran, and of course Nikken itself. If this appeals to you, I encourage you to consider joining my team and I will help you get started, especially if you are interested is making it easy for customers to buy from you online as I have. Leave me a comment below and I will contact you, or you can email me or call me at the number at the top right corner of this page.

Disclaimer and Disclosure

There is never any guarantee that you will make any money in network marketing, or any other entrepreneurial venture. I am a Nikken distributor and I earn most of my income in my business from retailing product directly to customers. I always have.

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