Is Xocai healthy chocolate just another network marketing scam or does it offer the potential to build a viable and sustainable home business? Xocai has been on the market since 2006. Since that time, so many articles and websites have purported to know the truth about the company and whether its line of chocolates is the real deal. The purpose of this article is to share one network marketer’s perspective on Xocai and its viability as a home business.
To begin, I’d like to share what I believe to be the key criteria to building a successful business. There are several key factors that are going to determine the long term viability of any enterprise:
- You must have a genuine demand for your product
- You must have a customers willing to purchase and repurchase
- You must must be able to survive growth and competition
Let us examine Xocai relative to each of these factors.
Genuine product demand
The chocolate market itself is certainly very significant. According to industry sources, 9 out of 10 people like and eat chocolate — most on a regular basis. The average American consumes 12 pounds of chocolate per year. So chocolate as a candy is definitely big business.
Xocai chocolate is marketed as “healthy”. What makes it unique is that its chocolate is cold-pressed thereby preserving the very high antioxidant properties of raw cocoa, which is its primary ingredient. The chocolate is supplemented with super fruits such as the acai berry giving it even more of a health boost. The super fruits market has become quite a significant subset of the health food and drink industries over the past several years and healthy chocolate is a compelling cross over of two large industries: health food and chocolate.
Customers willing to repurchase
One of the obvious failings of most network marketing businesses is the lack of a viable retail customer base willing to repurchase. This is what ultimately gets so many companies into regulatory trouble because the only customer base that seems to be willing to purchase are distributors who do so in order to position themselves to earn. Where there is no meaningful retail market, the pressure to constantly recruit becomes severe and the business model no longer holds up.
In fact, looking beyond just the network marketing industry and instead looking at business in general, most companies fail inside of 3 years because they lack recurring buying. Recurring buying from a retail customer base is the lifeblood of any successful business/
Thus far, Xocai appears to be positioned well. It boasts some of the highest customer and distributor retention rates in the industry. The company’s one year retention rate for both distributors and customers is well above 70%. It’s two year retention is also very strong, so there is strong recurring buying.
Surviving growth and competition
Often it can be fairly easy for a company to have some success out of the gate, particularly if they are launched well. There is often excitement and buzz around a new venture and with no negative track record, people are optimistic.
To survive, a company must have the systems and infrastructure in place to handle growth; inability to handle rapid growth can often be a company’s downfall. Is it able to maintain its inventory, turn around orders on a timely basis and maintain quality customer service? These things matter.
Although it has had a couple of minor bumps, Xocai has demonstrated an ability to handle growth well. Its business has more than doubled each of its first 4 years and it has maintained effective quality and order flow throughout. It has also continued to expand internationally into new markets.
Xocai has also managed its competition well. While it has a distinct advantage in that its cold pressed technology is protected by a worldwide patent, the company has also been able to establish itself as a serious player in the home business space. Its rate of growth in new distributors continues to climb month after month.
In this overview I have deliberately avoided any discussion around compensation. The reason for that is that the compensation plan in and of itself really has little if any impact on the success of any network marketer’s business. Within the industry, less than one half of one percent ever earn a six figure income, notwithstanding the quality of the compensation plans. Few companies ever see more than 1% to 3% reach those levels.
Overall, based on the key criteria I have identified, Xocai looks to be a solid opportunity from my perspective as a network marketer. It demonstrates the qualities of a business that can endure over time.