Frequently Asked Questions
With approximately 99.6% of the 120 million North American households currently not being reached through our direct-selling/network marketing distribution network, Watkins occasionally markets select products through retail distribution channels to advertise the brand, raise consumer awareness and increase its customer base. A limited portion of the product line is occasionally made available for sale through pharmacies, spas, direct response, specialty gift stores and grocers, various retail chains and other appropriate distribution channels in order to provide Watkins additional ways to reach new consumers and to provide a self-funding mechanism for brand awareness advertising that ultimately helps drive new business to Associates.
Our goal is to reach the more than 119 million North American households who are not yet being approached by our Associates in order to generate new business and create strong consumer demand that allows us to win, our Associates to win and the customer to win. Increased demand supports our Associates' ability to expand their customer reach and increase their monthly sales volume. The Associate's direct relationship to the customer and access to the entire product line will continue to keep the Associate in the forefront of their customers' minds and ultimately gives the Associate a competitive marketing advantage over other distribution channels.
Many companies blend marketing methods and use multiple channels to get their products to the consumer. Dove has created Dove Chocolate Discoveries, Jockey has a Jockey Person-to-Person Division, The Body Shop markets via The Body Shop at Home, Partylite Gifts markets retail as Colonial Candles of Cape Cod. Like Watkins, these companies have experienced how having their brand available through multiple channels results in more sales through each of those channels. We expect more and more companies will use multiple channels in the future, because it’s a win-win model.
Questions and answers regarding Watkins products being sold through retail stores and alternate distribution channels
Q: How will a retail presence affect the income opportunity for existing and future Watkins Associates?
A: Retail exposure will increase the visibility of Watkins and enhance our company's image. This ultimately drives more business to our Associates. The goal is a win/win: more customers and Associate prospects for our Associates and more customers for Watkins.
Watkins pays commissions to its Associates to develop and maintain a customer base and to add value to the customers shopping experience. There is no reason that an Associate's customer who is satisfied and has regular access to purchase from that Associate would stop purchasing through the direct-selling channel. Furthermore with increased brand recognition, selling and sponsoring is made easier for Associates who are actively building a business.
Q: What kind of wholesale pricing does Watkins make available to the retail trade?
A: To maintain retail price integrity and stability, the wholesale pricing structure that Watkins makes available to the retail trade is designed to encourage retailers to sell the products at or above the Watkins suggested retail price. Ultimately, of course, all Associates and retailers are able to set their own retail prices, as Watkins can only create a suggested retail price list. However, Watkins will carefully monitor its relationships with the retail trade as it does with its Associates to ensure that everyone's best interests are being served.
Q: How can an Associate compete with a retailer who sells certain Watkins products at a price lower than the suggested retail price?
A: Associates can use their discounts and product bonuses and access to the entire product line to beat any pricing and/or promotion being offered by a retail establishment. For example, if a customer finds that a store is selling a particular Watkins product at 20% less than the suggested retail price, the Associate can offer that customer a 25% discount on that same product with orders over $40. These types of promotions help serve as order builders. There are endless promotional upselling opportunities that Associates can use to satisfy their customers and compete with any retail establishment while also increasing their sales and profits.
Q: Why don't other network marketing/direct selling companies sell their products through retail establishments as a complement to their direct selling channel?
A: Many companies blend marketing methods and use multiple channels to get their products to the consumer. Dove has created Dove Chocolate Discoveries, Jockey has a Jockey Person-to-Person Division, The Body Shop markets via The Body Shop at Home, Partylite Gifts markets retail as Colonial Candles of Cape Cod. Like Watkins, these companies have experienced how having their brand available through multiple channels results in more sales through each of those channels. We expect more and more companies will use multiple channels in the future, because it’s a win-win model.
With the internet, today's global economy, and the opportunity for the consumer to shop so many different ways, the consumer has become more sophisticated than ever before and demands the opportunity to access product lines through the shopping channel of his/her choice. Companies with legitimate product lines that will stand the test of time must be leveraging multiple distribution channels to reach their potential and remain competitive.
Q: Can Watkins Associates sell to retail channels?
A: Yes. As of January 2004, Watkins Associates, within certain guidelines, can sell a limited number of products to retail stores for resale. To find out more about selling to retail stores, read the Associate Retail Summary found in the Business Bulletin area of WatkinsOnline.com.
Although sales to retail stores may generate volume and profits for Associates, it is important to understand the intent of this initiative: It is designed to assist Associates' networking efforts in their communities to reach more customers and prospects for their direct selling business. The initiative is designed to complement the Living Naturally Program and all other direct selling aspects of your business.
Q: How much of the Watkins product line is available through alternate retail distribution channels?
A: To give Associates the competitive edge, Watkins makes only a select portion of its product line available through alternate distribution channels. Most retail establishments will never carry more than a small percentage of the product line. This encourages customers and prospects looking to access the entire product line to seek the added value of an Associate.
Q: Does Watkins' retail strategy take corporate resources away from its direct selling business?
A: Watkins retail strategy is all about additional business that comes from reaching new customers who are not being reached by our network of independent Associates while also creating more visibility for the Watkins name, and enhancing our company's image. This will mean added exposure for Watkins, which will have a halo effect over the core direct-selling business.
It's important to remember that direct selling through Watkins Associates is Watkins' primary selling channel and that most of the company's revenues continue to come from direct selling. In addition to commissions, Watkins invested considerable dollars in training tools, general support, and incentive trips for its core direct selling business and will continue investing the necessary dollars to support our Associates. We are making significant investments in the Living Naturally program for Associates as well as other programs, as we believe there is tremendous growth potential for our direct selling business.
However, we know from our research that the Watkins name has tremendous recognition and brand equity with consumers, and we have learned that most consumers have not been approached by Associates and/or do not know where or how to purchase Watkins products. By opening up the ability to buy the Watkins brand through select retail establishments we bring them into our franchise while elevating the brand's image.