The Elephant in the Living Room

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I'm not getting how that solves the problems of credit dilution, or of paying 4 times real estate value, or of owners competing with new sales. Plus, under this plan, the poor guy who paid $150 gets LESS than what he's able to get now, on ebay.

Look at DVC. They don't need to lie, or bribe people to attend a sales presentation. And they don't worry about resales, because the pricing is so close. That's where Worldmark needs to get to solve these probs.

It doesn't solve the problem of credit dilution. That is solved through other actions on the board for setting credit values and inserting them into WorldMark correctly. I already stated that I believe there are solutions for that problem of which you have proposed many that I would support.

My solution solves the problem of 50% sales and marketing fees for the resort developer.

Here's how. If Trendwest is selling credits at $1.50 at the resort (I believe full retail is about $1.75 today) and $.75 to authorized resellers, the net margin to Trendwest is the same. They have a cost replacement of $.75 that they won't be doing anymore for those sales because someone else will be doing that function, namely the authorized reseller.

Now, those resellers mark up the product 20%, so their fee is $.93/credit from an authorized reseller. That is as compared to about $.80 or so on the internet today. All Trendwest needs to do is add a couple of features that don't transfer upon resale such as enhanced bonus time paid for by credits that they rent from owners and re-rent as part of a new FAX program and elimination of the credit rental board on the WM4M.

This is about the same difference is cost that DVC has for its points from the developer vs. on resale. People will pay a premium for purchases made in this way. You can even authorize the resellers to use Trendwest's name and issue special certificates. I think it would work.

[PA- Junior Member Find all posts View Profile Close PA-]

I'm dense, speak slowly. If TW price is $1.74, and their cost of building is 40cents per credit or so, how does changing the way credits are resold affect it? It's still too high a price and causes all these other problems, but they can't lower it because cost of sales is so high.

Also, the spread is still to much. When DVC was selling credits for $95 (less a $10 discount at the time), the exact same credits on the after market were about $80.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I'm dense, speak slowly. If TW price is $1.74, and their cost of building is 40cents per credit or so, how does changing the way credits are resold affect it? It's still too high a price and causes all these other problems, but they can't lower it because cost of sales is so high.

Also, the spread is still to much. When DVC was selling credits for $95 (less a $10 discount at the time), the exact same credits on the after market were about $80.

Is TW actual selling price $1.74/credit on average? Or, is it lower? In other words, do they keep dropping the price until you leave screaming? I was assuming that the first price they quote you is $1.74. The price on the contract ends up lower like around $1.50. This is the first assumption that needs validation.

Now, IF the average selling price from the developer is $1.50 and the cost of sales and marketing is 50% (another assumption), then Trendwest is netting $.75/credit after paying sales and marketing costs.

So, my recommendation is based on two data points that I pulled out of thin air. But, they can be checked.

Okay, so if my assumptions are correct, then Trendwest selling through a direct sales force or an authorized reseller channel yields the same amount to them, namely $.75/credit. It's just the street price at a resort is $1.50/credit and the street price form an authorized reseller is $.93. It's just that the sales and marketing effort is $.57/credit cheaper using the authorized channel.

I can tell you that resellers would love to buy credits from Trendwest at $.75 that they could sell for $.93. That is if my 3rd assumption held true which is a developer only product would sell for a slight premium over a straight resale product.

[PA- Junior Member Find all posts View Profile Close PA-]

OK, now I get it. You aren't talking about the resellers selling used credits, but developer credits.

The problem I see is that the resellers get 80-90 cents only because Trendwest is spending the 57cents per credit to make the market. If they stopped, and gave credits to a different company to sell, is there enough latent pent up demand to buy all the credits at that price? I don't know, it might be tough.

Secondly, the only reason I think TW can reduce their cost of sales is because they would only be going after the existing base, which is already educated on the need for credits.

I'm not saying your way wouldn't work as well, hadn't thought about that angle. Perhaps a leaner org could sell them cheaper, but then again, maybe not effectively enough.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I don't have an answer. The current state of the market requires the resort developer to educate the consumers and then close them before they leave.

What is needed is a massive education program that gets people seeking timeshares or information about timesharing. It just doesnt exist today.