How Drug Dealers Get Rich

Have you ever wondered about the finances of drug dealers? I never gave it much thought myself until I read a news story about a guy in a small town in Mexico whose house was raided by the Mexican National Police. As it turns out, the cops found over ten million US dollars stacked in one of the spare bedrooms!

What! That definitely got me thinking…

First of all, it helps to have a product that people will kill for; although, usually, that is not in the literal sense and more like the I-Pad or something like it. But, still, the demand for their product requires little in the way of marketing which is good because I doubt the major television networks would sell them air time...I think...

I used to think that a product, regardless of the quality, would sell in direct proportion to the effectiveness of the marketing behind it. Drugs forced me to rethink my thinking in this regard but drugs are unique and a large part of the success of the I-Pad and other Apple products is the brilliant marketing behind all of them.

So I had to give it some real thought—why are drugs about the only product that does not need marketing? Take someone who doesn’t use drugs one day and, one year later is a stone cold addict who has lost his job, his family, and his self-respect to...oh, I don’t know…let's just pick some drug to use as an example, alcohol, let's say.

Wait a minute, I thought, alcohol is heavily marketed as is the single most favorite drug of choice in the world—sugar! I quickly realized that sugar and alcohol would sell even if there was not a dollar spent on marketing; the marketing that is directed to selling those two products is largely to establish differentiation in the mind of the consumer: Coors versus Bud, Coke versus Pepsi.

Drug dealers who sell illegal drugs are forced to work differently than those who are selling legal drugs. That is why drug dealers often resort to murder to eliminate the competition. Murder is actually quite bad for business and drug dealers could afford to outspend either Coke or Pepsi in marketing dollars if only they were allowed to do so; but they are not and so take the other options that are available to them to gain market share.

Another way that a business or person with a product to sell will gain market share is by selling for less than the competition. Drug dealers obviate the need to do this by controlling the distribution in a larger area and they gain that control, largely, by imposing drastic price control measures—again, their basic business model is to kill competitors.

But, ultimately, drug profits are based on the Coke Machine Model. The CMM is simply lots of distribution points—to make the drug readily available. The cops bust a large number of street level pushers—the jails are filled to clogging the system with them—but as a percentage of the total amount of street level distributors out there, I would have to think the number is small. And, besides, drug dealers have little problem replacing those distributors that do get apprehended.

Buyers and sellers are both easy to come by in the drug world—legal or illegal.

If you have a product to sell, the fundamental lesson to learn from the drug gangs is this: the more distributors you have, the better. That is why product manufacturers want so badly to get their product into Wal-Mart—lots of distribution points.

But if you are not selling drugs and can’t get into Wal-Mart, what are your alternatives? Get a large number of distributors and make them your best customers: Almost every knucklehead selling drugs on the street is an addict.

Click on the link below for more on this subject:

HOW DRUG DEALERS GET RICH: And How You Can, Too - Without Getting Tortured, Murdered, or Jailed!