Why does Amsoil market the way it does?

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Just as the title states, not trying to argue the quality of the oil, but just why do they market/sell the oil in the way they do? Wouldn't they make more money if they started selling it to big box stores? Why only sell through authorized sellers? I don't understand the reasoning behind this with them... Can someone help me understand why they sell this way?

Thank you
 
I doubt it would make a lot more money sold at box stores- put it on the shelf and it's instantly the most expensive oil at the store (the Signature Series line up, that is). They would have to price it at their "Preferred Customer" price to stay competitive with Royal Purple and it would still cost more. That said, I'm not sure why they model the way they do. My guess is that their current model allows them to spend very little on marketing as their dealers do most of the leg work for them. That's just a guess though.
 
If WM can sell RP on the shelf at the prices it does, with the volume they move I'm pretty sure Amsoil would be willing to play ball on the amount they'd purchase.

But, I'm sure Amsoil would just make an inferior blend for WM yet stick the same label on it as their regular stuff
spankme2.gif
/pessimistic sarcasm
 
A big box store HAS NO MARKETING. It is shelf space for a product that needs a rep to explain its benefits and why you would feel better about using it vs other excellent oils that are less expensive. Amsoil is half direct marketing and half product for people.

Once you loose marketing Amsoil is left with a more expensive price tag on huge shelf with a sea of products.
 
The system works well for AMSOIL now and no need to change. Like stated above, they really don't do much in the way of major marketing. If they went to the big box stores it would seriously hurt all the dealers kind of.

Plus there are probably a bunch of commercial accounts that move a bunch of product which brings in the money.
 
Low margin product and retail shelf space is expensive. AMSOIL, like Redline and Royal Purple, is a one-trick-pony unlike the majors so their chosen business model enables them to run the business profitably.
 
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Since Redline is now a mass market corporate oil like Royal Purple (both are no longer "boutique mom and pop companies") I wonder why it's not sold at Walmart like Royal Purple now is?
 
Amsoil uses MLM because it's more cost effective for them. It keeps prices inflated with several layers of middle men, and gives a perceived additional value for some. A couple times I've seen it on the shelf at a farm & home type store, but the prices were significantly higher than similar products and the bottles had a fair amount of dust on them.
 
The decision to rely on a network of distributors to market and sell your product (called a distribution channel) as opposed to relying on a retailers marketing, has advantages and disadvantages. Too many to list here without writing a book. But in short, a boutique or specialty item mfg like an Amsoil or Amway can better get their products into the hands (market penetration) of the people that are most likely to buy it using a dealer/distributor sales channel. The mfg has minimal to no marketing costs as the distributor does that in exchange for a slice of the pie. It's not uncommon for mfgs to prohibit a distributor from selling competitor products (captive).

I've been in sales and marketing for a while, most recently as a BDE in the service/software industry.
 
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AMSOIL can be found in more and more places now, on the shelf. Rural Kings near me carry some of it now as does Napa stores. I'll use it and pay the premium for it when its there on a shelf and I can walk out with it same day. But if I have to "sign" up and go through all this hassle to get "preferred member" pricing and then pay shipping etc. It isn't worth the trouble. I'm going with something else.This is the main reason I have never tried Schaeffers oils in my PowerStroke, they are supposed to be the best oil made for a PSD but I'm not paying a premium for it, then paying shipping AND having to wait for it...
 
I can buy almost any Amsoil I want between what is stocked at the local Atwood's Farm and Ranch store, and the local independent biker shop.

Both places sell it for more than what a dealer charges.

I'm not into spending $14 for a quart of oil, so I'll stick with the 5 quart jugs I find on clearance.
 
Originally Posted by Linctex


I'm not into spending $14 for a quart of oil, so I'll stick with the 5 quart jugs I find on clearance.


When an oil is that good they should be able to warranty your engine for a million miles.
 
Originally Posted by madRiver
A big box store HAS NO MARKETING. It is shelf space for a product that needs a rep to explain its benefits and why you would feel better about using it vs other excellent oils that are less expensive. Amsoil is half direct marketing and half product for people.

Once you loose marketing Amsoil is left with a more expensive price tag on huge shelf with a sea of products.



A lot of times in retail a company has to pay for the shelf space. Or they pay to be a preferred supplier and get their product on an endcap versus down an aisle.
 
What a worthless response. Way to pad your post count while contributing absolutely nothing and wasting bandwidth.

Originally Posted by JohnnyJohnson
Does it matter it isn't your business?
 
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It's a profitable method for a low capacity company.
the small but loyal band of true believers keep the money flowing.
Even with the several layers of product now offered, the top of the line
product is little, if any, better than the best that Pennzoil, etc. puts on the shelves.

My 2¢
 
Makes sense... Forgot how expensive shelf space is, and probably the "allure" of being a special oil you have to know someone to get/cant just go buy adds the the fanciness of it all.
 
Originally Posted by bdcardinal
Originally Posted by madRiver
A big box store HAS NO MARKETING. It is shelf space for a product that needs a rep to explain its benefits and why you would feel better about using it vs other excellent oils that are less expensive. Amsoil is half direct marketing and half product for people.

Once you loose marketing Amsoil is left with a more expensive price tag on huge shelf with a sea of products.



A lot of times in retail a company has to pay for the shelf space. Or they pay to be a preferred supplier and get their product on an endcap versus down an aisle.


And a company like Walmart doesn't care if they get a fee from you, if it doesn't move, they'll get rid of it as they also make money on volume. There many people trying to get on the shelves, the retailer is only going to pick the ones that they know will sell. Fees only go so far.
 
I don't think it is quite as nefarious as some make it out to be, I believe the marking method they have now was probably the most effective for the time it was introduced. But things have changed in retail and now it likely somewhat less effective than it used to be. Besides, being a small blender there's no way they can compete on cost with a major oil company, so when viewed on the shelf it is at an immediate disadvantage to their competitors based on price alone - just look at the Royal Purple example that was already mentioned.

Amsoil, Royal Purple, Redline and others just do not have the name penetration to generate sufficient sales in mass marketing so it's going to lose every time on the shelves at Walmart. You have to be told -and believe- that it is better than Mobil 1 or Castrol or Pennzoil Platinum for that customer to pick up the Amsoil container rather than one of the others, despite the price differential. How many people are there in the general population that are willing to do that? What mass marketing has Amsoil done to cause it to happen?
 
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