For those who keep an ear to the ground around network marketing circles, it seems like every few months, a long-lost tribe emerges from the foothills of an exotic locale bearing a new fruit that has kept them in peak health for centuries. These tribesmen seem to have corporate owners and venture capitalists on speed-dial and next thing you know, a new super-fruit drink is born. This has been the trend of the past ten or so years.
The explosive growth of companies like Tahitian Noni (TNI), Monavie, Xango, etc., have defined the term critical mass and as a result more and more copycats have emerged. Over the past decade, the “
functional beverage” sector of network marketing companies has grown exponentially.
Market factors and consumer sentiment play key roles in the success and failure of any company or product but because of the power of word of mouth distribution, these factors affect network marketing companies immensely.
There are many factors as to why the functional beverage sector has flourished in network marketing, and through study and observation of the functional beverage sector of network marketing companies over the past several years, I have observed traits and characteristics that have lead to success and failure of these companies. The success or failure of the functional beverage multi-level marketing (MLM) companies, the market corrections and response by consumers and distributors alike, result in a refinement of products, compensation plans and business models. These reactions to market factors create opportunities – either for established companies or new start-ups that take this critical data and integrate it into their own companies.
Since the success of network marketing distributors are so closely linked to the rise and fall of these market changes and corporate reactions, I believe it is vitally important for distributors to pay attention to emerging trends.
The end result of these observations have brought me to the conclusion that the emergence of a new niche within the functional beverage industry – the
energy shot – will replace health juices as the network marketing trendsetter and be the new explosive growth product within the next 18-24 months.
The aforementioned healthy juice beverages offered some key benefits to both the corporate ownership and investors of network marketing companies and distributors. For companies, they could charge a lot of money for them. Often $120-200 monthly for an individual monthly supply on autoship. Now despite all the varied claims of the exoticness of any individual ingredient, there were large profit margins in these juices. It wasn’t the berries that cost $100 - even though I distinctly remember sitting in on a presentation for Zrii’s functional beverage where the presenter went into painstaking detail to describe the laborious task of keeping the constant stream of amalaki fruit coming down from the “glacial run-off of the Himalayas.” Packed into every little bottle of these juices was a mighty profit margin that was highly conducive to creating healthy companies and happy distributors - for a time. I say “for a time,” because there were also many unintended consequences that resulted from the success of these juice products.
In the beginning, when economic times were booming, buying a large $1500 start-up package and committing $200 a month to an autoship was still not easy for everyone, but as these companies proved - it worked. Large up-front packages like the one I first purchased - complete with roll-out banners, tear-off pads and handy carrying tote offered big commissions on the front end. Couple that with the monthly reorders funneled through the never-before-seen hybrid binary and uni-level pay plans and these companies shot off like rockets. Big money was made by the companies and by the uplines.
The unintended consequences were big money was spent by a lot of people who could not and probably should not have put it on their credit card. These new pay plans looked amazing on paper and seemed so easy to build. “Just get two who get two” - remember?
Well, in practice - selling fruit juice for $50 a bottle turned out to be a harder job than most realized. The exorbitant prices were very conducive to large volume and big commission checks if one was check qualified, but there really were no differences between a retail customer and a distributor. Without the lure of a commission check few people wanted a $55 dollar bottle of fruit juice. Where did a lot of it go? Ebay, Craigslist - where distributors were dumping it for half-cost to get rid of it or giving away whole bottles in hopes that they might hook a new distributor and ease themselves the $171 monthly autoship.
Another key issue with many of these companies was the weight of the product - none probably more so than the gorgeous bottle of Xango juice. Xango offered one of the most attractive, sleek bottles of any company, but it was made of glass and weighed a ton. The “wine-bottle” look that these companies had was attractive, but it killed distributors in shipping costs. The already expensive autoships were made even more difficult to afford by cumbersome shipping prices. During this time also came a heavy influence of internet based network marketing techniques which made long-distance sampling essential. These heavy 25 oz bottles made that too nearly impossible.
Lastly, I want to address one other issue that plagued the companies of the “juice wars” and that is efficacy . Did the products work? I am not going to claim that they did not work. Many promoted anti-inflammatory properties, and I know first hand that Zrii (cost aside) was a good product that did many of the things the company claimed. However, it takes a person several weeks of daily consumption to begin to really notice any results from many of the products. This made sampling very difficult. Since selling a $55 bottle of juice was out of the question for most people, offering a small taste of the product really did nothing to fill the gap between Welch’s Grape and a functional beverage. In order to get someone to try the product long enough to find benefit from it, you almost had to give the bottles away. I can attest that at $55 a bottle, giving product away is not a sound plan for financial success.
During this time, these juice companies did what I like to call the “bottle rocket.” They took off like they were headed to Mars and in a hurry! However, once the “new” wore off they were left with an overpriced product that took constant consumption over a long period of time to see results. It was expensive to ship and the hybrid
binary compensation plan left many stuck in “dead legs” with none of the “spillover” they had undoubtedly been promised. Without the presentation and without the compensation plan, it was a shell game. The jig was up.
Not all is lost by the mistakes made by these type of nutritional companies because they and their competition have been keen to recover and make changes to their structure, products and plans.
Based on my observations, the characteristics of the most successful network marketing product today would have a product that works well in a short amount of time, that is small and easily shippable, has a large enough profit margin to be conducive to an exciting yet fair compensation plan, and a price that doesn’t induce sticker shock and is in keeping with or ahead of a current trend.
The product I just described to you is the liquid
energy shot, and it’s coming to a network marketing company near you. I predict in the next 18-24 months, we will see and explosion of energy shot products.
In stores across America, consumers have been trained that
energy drinks and shots cost between $2.50-$4.00 - the geniuses at RedBull can be thanked for this. Much like the exotic berries of MLM juice companies, making an energy drink doesn’t cost much more than making a cola really, but the shelf price that has been established leaves a large margin of profit that can successfully fuel a MLM compensation plan. Consumers have been trained that $3 is roughly the cost of an energy shot, so as long as you’re competitive you have a great shot at being successful.
5-Hour Energy Shots – the brainchild of a non-MLM company Living Essentials has an advertising budget of $60 million annually. From Superbowl Ads to web advertising, Living Essentials has been spending this large amount of money introducing consumers of all ages to their product. Instead of taking the “young, hip” approach of energy drink manufacturers Monster or Rockstar, 5-Hour Energy is targeted for everyone. And sales data shows that everyone from teens to baby boomers are trying energy shots..
According to the research firm Mintel,
energy drink product launches have increased 110% in general and sales rose 240% from 2004-2009. Because of this new acceptance of
energy shots as a product for mass consumption generated from the aggressive advertising of
5-Hour Energy and others, I believe energy shots will be well received when introduced through network marketing and their large profit margins will likely allow for great paying compensation plans without the same sticker-shock associated with their juice company predecessors.
In the past few months, a host of companies have started to release
MLM energy shots. Vemma can be credited with being the first to get in the game with the immensely successful Verve.
New kid on the block, XIMO Health is hoping to get a jump start on the competition with their value-priced, herbal energy shot that launches next week. The company is owned by Erik Laver, the Co-founder of Send Out Cards and aims to sell their energy shot for $1 a serving – undercutting store-bought brands like 5-Hour Energy.
New company Nuvia3 is debuting their Shotwave product in the coming months along with the Reliv’s unveiling of their new “24K” shot. There is also another new company called Denovo7 which has been started by some former professional athletes selling an energy shot through network marketing. Unfortunately at $4-roughly, I think Denovo7 has priced themselves out of the market in my opinion.
Because of shipping costs, energy drinks like Monavie’s EMV, XOWII/Evolv's Energy or Youngevity’s recent acquisition of ACT Energy drinks do not fall into this category and won’t have the same success in my opinion. The larger liquid volume of products such as these make shipping a chore and will hold them back from this energy shot trend unless they lower their prices or formulate a shot also. The latter of which, I predict to be highly likely.
In conclusion, I have made a solid-case as to why the juice products sold through network marketing have led to an entirely new category of
network marketing companies. Hopefully, armed with the experience of their prior mistakes, companies selling these new energy shots will create many new millionaires in the future and help grow the industry in a positive way. After reading this article, I hope you find yourself at the forefront of this emerging trend and don't let this train pass you buy.
XIMO Health's flagship product is its Golden Energy Shot. This product is unique because there is nothing like it on the market right now. It is an energy shot, but not in the "sugary-caffeinated" sort of energy shot/drink way. In fact, these energy shots have no sugar, fat or calories. Testimonials claim the XIMO drink provides hours of boosted energy, mental focus and help users with possible weight loss.
XIMO Health is owned by Erik Laver. He is an 18-year veteran of the network marketing industry, starting his network marketing career in 1992 with a nutritional company called E'OLA International. 
If you're thinking about starting a home based business with the XIMO MLM, you will find it is a great value for customers and distributors.
