What is a “Prosumer” & Why Should I Care

 

Let’s Talk About Wealth.

 

The good news is that the world is experiencing the fastest wealth creation ever. According to Credit Suisse, the total wealth in the world grew by 6 percent last year to $280 trillion.

 

The bad news is that the wealthiest 1 percent of the world's population owns more than half of the world's wealth.

 

Inequality.org reports that “ultra high net worth individuals hold an astoundingly disproportionate share of the global wealth. More than 70 percent of the world’s adults own under $10,000 in wealth. This 70.1 percent of the world holds only 3 percent of global wealth. The world’s wealthiest individuals, those owning over $100,000 in assets, total only 8.6 percent of the global population but own 85.6 percent of global wealth.

 

In other words, the rich are getting richer, the poor are getting poorer, and the middle class is disappearing.

 

If you are like most people, you’re a bug and not a windshield in this saga.

 

Now Let’s Talk About Power.

People with a lot of money have a lot of power and use it to keep both. They run societies in such a way that everyday men and women are educated and trained (dare we say brainwashed?) to be good workers and good consumers. This keeps the economy flowing and sending more money their way.

Up until now, the only real way for an “ordinary” person (who wasn’t born with a golden spoon in his or her mouth) to break out of the mold and build wealth-- was to come up with an incredible invention, create a masterpiece, write a bestselling book, be a phenomenal artist or athlete, build an amazing marketing funnel, hit the jackpot with investing, or work long and hard to climb the corporate ladder in an amazing company that offered shares at startup.

 

Finally There’s a Better Way

Most people don't realize it, but there is a huge chunk of money (25 billion dollars per year) flowing through the economy that ordinary people have the power to control.

That money is exchanged through retail sales. In other words, people are giving 25 billion dollars of their hard earned dollars every year to companies that provide them with “stuff”.

Even worse – most of the money they spend doesn’t actually go towards making the stuff. As globalization spreads, manufacturing has actually become cheaper.

What has become more expensive, is MARKETING.

The more competition increases due to globalization, the more choices consumers have, and the harder it becomes for companies to get customers to buy their particular brands.

The companies that do manage to create “loyal fan” customers often charge a premium price for the privilege of buying the brand. This creates hefty retail profits.

Let’s take a look at Nike shoes.

 

nike.jpg 

Source: Matthew Kish of the Portland Business Journal

In the case of a $100 shoe, the manufacturing actually does take a pretty big chunk at $28.50. (Many other types of products can be made for much less).

But look at the huge chunk that goes for marketing. This means you are paying to be pitched! And if you say that you didn’t need a pitch because you would have purchased the shoes anyway…well then you paid for everyone else to get pitched.

And now look at the even larger chunk that goes for retail mark-up. Since Nike is a coveted brand, they can afford to price their shoes very high. This means you’re paying for a name.

 

Let’s Take Back Our Power and earn some Profits! 

We could summarize the above scenario as follows:

The two major players in the retail economy are PRO-ducers and CON-sumers.

  • PRO-ducers, PRO-duce PRO-ducts and earn all the PRO-fits.
  • CON-sumers are CON vinced (or sometimes CON ned) into buying and CON suming.

If we take the CON out of consumer and replace it with PRO , we get PROSUMER.

 

Alvin Toeffler, author of Future Trends, coined the term “prosumer” to mean two things:

A consumer who both produces and consumes a product

or a consumer who likes to buy professional-grade items for personal use.

What if we took both definitions and used them to take back retail profits!

Here’s how the PROSUMER PLAN works:

First, we band together as consumers to gather large BUYING POWER. This allows us to buy high quality (even professional-grade) products directly from the manufacturers at wholesale prices.

Then, we eliminate marketing and most of the retail markup by agreeing to buy from our own collective. This allows us to control a big chunk of that retail pie!

Then we redistribute the profits back to the “prosumers” according to the market share they helped to build.

Very simple. Very cool.  Are you ready to join us?