Jan 12
23
The Next Big MLM
So many people hear the phrase, “our company will be the next billion dollar MLM, the next big opportunity is us, and I have no doubt we will be there”.
But clearly they’re not all going to make it, right? Of course not. According to Network Marketing for Dummies, there are over 1000 network marketing companies, and in the first year, most of them fail. About 200 of these network marketing companies belong to the DSA, leaving hundreds of companies as simple MLM startups with absolutely no future. So what makes one company work, and another fail? And what is it that takes a company from a new opportunity into a mature business? Let me suggest these elements of success:
The Company, must be financially transparent, and be lead by experienced leaders. There are only a small handful of publicly traded MLM companies, they include: NuSkin, Amway, Usana and a few others, but these are mature big companies, LifeVantage is public traded, but is small, and relatively new, very new if you discount the retail years. A pubic traded company forces them to spend money that provides transparency. It isn’t cheap, but it is the behavior that you can trust, where some companies make it up, a public traded company can not. Also look at its leadership. Are they experienced, and where did this experience come from?
The Timing must be perfect. In real estate, timing is all about location-location-location, in business, particularly in network marketing, its all about timing-timing-timing. Every company starts slow, and once it takes off, which happens at about $50 million a year in revenue, momentum launches that company through a surge of growth, until it levels out (maturity). If the business opportunity you’re looking at has already gone through that phase, you are not ground floor, not at all. The DSA, says the first 135,000 people in a network marketing business as distributors or agents, are ground floor, for companies that reach a mature status. Do NOT dismiss timing so quickly, and do not be fooled that a mature company is best, because they’ve got all the kinks worked out, or because they’re going global, or expanding their products. You get in late, you won’t grow something huge. Expanding products only helps existing distributors grow, it doesn’t help you come in and build a new business in a mature company.
The System they have must allow for you to be duplicatable, and allow others to do what you do. If it does not, your business won’t grow. They company must have a proven system that everybody is taught, and anybody can plug into. If this business is based solely off the Internet, it won’t work… because network marketing is a people business. Use the Internet to support your business, not build it. The company system must allow for you to do the work, if somebody else is doing the work, somebody else is getting paid, and its no more complex than that. Also, if you have to create a new system, and not follow an established one, endorsed and trained by the company, you will most likely fail, unless you’re a professional who has done this business before.
If you’re not Compensated for your work, why do it? The product must have enough margin built in for you to get paid, and you should be able to get paid quickly, and have a long term value. The compensation plan must reward all aspects of behavior both for short term and long term, and for the new distributor, and the top level agent.
The Product must be unique. It must be patented, to prevent others from duplicating your efforts, and taking your market share in the future. If its a health and wellness product, it must be backed by third party science, preferably peer reviewed and published research. Is your companies product based on borrowed science? (they take an ingredient and make a product around that ingredient, or is it a product in and of itself). If its a technology product, it must be unique and sustainable in the long term, for example, if you invested in a fax machine business, likely today you wouldn’t be growing. The product must also be consumable., if not, you’ll not create a long term growth and sustain it long term.
The trends of the market must dovetail with the story of your company. Who are your customers, and is your product in that demographic, and is it trendy? Do people want it? If not, good luck.
Peter Drucker a world renown economist, says if you are missing 1 of the items above, your chance of success are reduced to about 80%, if you’re missing 2, its reduced to about 40%, and if you’re missing 3, you simply will not succeed. Plug in your company into that formula and I can tell you why it will or will not work. Its that simple, no more.