Returns come from savings generated in logistics, currency management, administration and marketing in addition to those provided by suppliers against specific product purchases. When a product or service carries the MPower logo or displays the “MPower Eligible” seal, Members know that their purchases of that product or service will be managed to generate additional cash returns to them.
An example of how non-price factors can contribute to MPower cash for Members is the significant impact on logistics costs that can be made when a critical mass of Members from the same delivery area purchase the same product. The whole system is able to operate more efficiently and the savings from those efficiencies are shared with Members.
Similarly, by operating booking programs with defined stop and start buying times, marketing and administrative efficiencies are achieved. Of course, we must not lose sight of the fact that the largest contributor to MPower cash for Members comes from suppliers’ returning part of the price of products based on volumes, market conditions and the supplier’s own ability to achieve efficiencies by working with Farmers of North America.
So, unlike rebate programs, MPower Rewards are not calculated on price alone. Instead, MPower Rewards are used to share efficiencies. Suppliers are willing to share the value of such savings on MPower eligible products because those result from Members actively using the farm business alliance.
Secondly, MPower Rewards protect suppliers from predatory practices in the market or adverse reactions from distributors and manufacturers. This protection comes from the fact that the supplier is able to price products close to prevailing retail rates and return price discounts through MPower Rewards rather than up front pricing. So there is no sensible retaliation for others to take.