This article is translated from Bisnis Plus Magazine edisi 35 2009
What's the difference between BannerPOINT and BannerStore?
BannerStore is designed as a convenience store, which means it's supermarket based. So there is a shop and products. On the other hand BannerPOINT's concept is a non-store retailing, there is no shop. Everything can be done from home as long as there is computer and telephone. The point is , customer comes to BannerStore, but BannerPOINT goes to consumer. So, this BannerPOINT concept is more simple and efficient, there is no space rental, no electricity costs and employee payroll. These are all the costs that burdens shop based retailing. That's not considering payment for bonus, so this doubles the costs. On the other hand, BannerPOINT is not like that. BannerPOINT maximizes products distribution purely using the strength of networks. Not through shops like retail in general.
So, the difference is BannerStore is shop based. Meanwhile, BannerPOINT is personal based.
That's true (Nods head).
What about the products?
Now, this is the thing. BannerPOINT really carries products which is already known in the society. For example, people already know what is Indomie, what is Lifebuoy, what is Kapal Api Coffee, what is Rajalele Rice and so on. So we do not carry non branded products. This is the unique point of BannerPOINT, that we are really "Playing" in the real retail world, with prices that are not different with big retailers. The only things is that we maximizes the distribution process by using the the power of networking, not based on shops or outlet. That's why we are much more efficient. This is the real key of BannerPOINT.
But, if the only by beinge efficient, then the margin must be really thin right?
That is correct. We do not deny that. Moreover if compared to Tiens Bonus. But, we have to remember, the rule in retail world is at the volume. The bigger our volume is, then the price that we can get from the supplier is better. This is what we are trying to increase the key is at the volume, therefor apart from decreasing the ratio of operational costs towards sales volume, with big volume we will also get product quantity discount. Now, in retail world that's where the margin comes from. We are sure that we can get product quantity discount, remembering Tiens network in Indonesia has already reached four millions. Now if 8 years ago we start BannerPOINT, maybe we would not dare to try. Another factor is, all our payment is using CBD (Cash Before Delivery), we pay cash straight away. Right here we can get additional margin of 1-3%
It looks like the 4 Millions Distributors has become an asset?
(Smiles while nods his head) Because of the four million, BannerPOINT got a very positive responds. They really welcome us. For example, what happened in East Java. At the first order of Indomie, we finished 20 thousand cartons. Actually this number is very significant. Why? Because, as one of our networker told us, who used to be the manager of a quite famous big retailer, with 7 outlets in Surabaya, they could only finish 3 thousand - 4 thousand cartons of Indomie per month. So the number 20 thousand is record on its own.
Therefore, during the delivery, the principal suspected that we were stocking the products. When they investigate, at that time we were still using an emergency warehouse, together with a steel mill. That's why they were confused, when we answered that the Indomie was really sold by retailing. Not to be given away to employees of the steel business owner, that happens to be a Tiens Networker. They were confused, why does a steel businessman want to "Play" in retail? This is where the long talk happened, [especially after listening to BannerPOINT concept, we were introduced to the principal of the products that was marketed by the respective distributor. From one of the principal, we got a very satisfying deal.
Okay. Doesn't the branded product feel "Shy" being marketed through network marketing? At least, scared that their brand name will fall?
At the beginning I had the same doubt too. But after looking at the 4 million volume, wow they welcome us. The responds was so positive. That's what makes me happy. Because, what ever it is, the 4 million Tiens network shows loyal consumers that cannot be doubted. That is the same as the sales volume. One of the strength that network marketing has that is not in retails, is the ability to change preferences about products. That happened, when our networkers like one type of instant noodle. After we explained, finally they want to understand. "Okay, let just try this brand. Noodle will always be noodle anyway" says the networkers. This is the advantage of BannerPOINT, we are able to explain to the consumer, something that supermarkets cannot do.
May I know about the management of BannerPOINT. Is it Tiens as well?
In terms of management, BannerPOINT is handled by Jaring Ritel Indonesia (JRI), that even though the ownership is 100% belongs to Tiens, but was put together, controlled and watched by Tiens leaders. Why? Because these leaders know the exact network condition on the field. The result is amazing. In only two months, we already started in two provinces. Bali as the pilot project and East Java. The plan is to open in Jakarta and West Java in October. Then November Central Java and Yogyakarta. End of the year if everything goes well the target is at least 3/4 of the cities in Indonesia.
What is the substance of having a BannerPOINT?
A lot. Internally, to expand the network and increase wealth by using the concept of building people based economy. Externally, we want to erase the public stigma about network marketing that always talks about price mark up, the products are not able to sell and so on. With BannerPOINT, we use the products from the market leaders that are already known by the society with a transparent price, with our low selling cost - minimum the same with big retailers, we already proven these stigma to be wrong.
Oh yeah, What about DistributionPOINT(DP)?
The role of is no difference like Tiens stockists. But, they are specifically to market BannerPOINT products. The income is based on the total sales, the same with stockists. The requirement is minimum 5 Star.
This excerpt is taken from the Bisnis Plus Magazine.
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