All products have approximately the same markup depending on similar ingredients. As example, high quality shampoos typically sell from $8 to $24. Higher quality products cost more.

You will seldom see high quality products in discount stores like Wal-Mart. The average consumer does not appreciate a high quality product.

Usually you will find the high quality products at top end beauty salons or sold by MLM. The reason this is true is because the consumer must be educated about the product quality before they will pay extra for the quality.

Let us assume we have a $12 retail bottle of shampoo. Typically the discount wholesale price is $6. The store will mark up the product 100% from $6 to $12 retail. (I am not comparing the low quality product purchased for $2 and marked up to $12.)

The store sees the profit of $6 on a bottle of product. The store purchases quantity products to receive the discount and they store the products until sold. The higher the volume ordered the greater the discount. Virtually all product sold is sold at the store by the effort of the person in the store. This means the potential income from the product is totally limited to the customers visiting the store.

MLM distributes the profit of the product differently. Virtually everyone purchases the product at the retail price. The distributor does not mark the price up but directs the sale of the product to the company. When a customer purchases from the company the distributor receives a commission that is only a percentage of the wholesale markup. Typically the direct referral is 25% of the profit. In the example above the profit is $6 so the referral would be $1.50. More importantly, if a customer refers the product to someone else, the original referrer also receives a commission. Often that percentage is 5% or in this case $0.30. That percentage can be paid on thousands of people in a referral organization and can be extensive.

Suppose the store has ten customers. If they sell the shampoo for $12 they make a total of $60. If those customers come back they make another $6 each per order.

In MLM the store must sell the shampoo for $12 and make NO income because they purchased the bottle for $12 and sold it for $12. Here is the difference; the owner encourages the customer to purchase the product directly from the company and to tell their friends to purchase the product from the company. When the customer purchases directly the store will make $1.50. When the customer's friend purchases directly the store makes $0.30.

This is where the retail outlet owner must make a paradyne shift. They must have the vision to sell for the future instead of the moment. Supposed the store sells ten bottles retail every single day. This creates $60 a day as long as the store is open and selling every day. Under MLM suppose that they encourage only one person a day to buy from the company for a total of 12 days. Now suppose that each of those customers tell one a day and that process continues one referral at a time. In 12 days you would have 4095 customers at $0.30 each or $1228.50. This is equal to $40.95 a day every month.

The main point is, that in time, you can make thousands of dollars from products from customers that do not even live in your area, and the income continues long after you close your store.