As they say, systems don’t fail – people do. How about; is there a possibility that your MLM Company close shops in the future?
The network marketing industry gross sales as of 2014 skyrocketed probably to $100 billion+/-. And to be successful in this industry requires knowledge. The secret of success in network marketing industry is following a proven company, product, compensation plan and people/support system. As much as many people know of this principle of success in MLM business, it still amazes me to see new distributor being left with little or no system to follow in network marketing business.
How about the company itself? What are our assurance that they follow some certain guidelines / system? In order for us to be sure that our MLM Company is not closing shops in the future?
It is a make or break for the company as well. What makes the company be strong is also can destroy them.
Check the below lists and the opposite of these are the reasons why MLM Company close shops;
Company – It is very very important to know (as much as you can) your MLM company. Such knowledge includes;
- board of directors (owners and founders background), people they work with and partners;
- company’s good financial standing – not losing the business because of overcompensation;
- company’s government regulations and obligations such as audit, registrations, license, certification and taxes (beware of tax evasions);
- company’s future plans and expansion programs (especially if company is opening a new company just to accommodate expansions – is a red flag).
- company’s policy and terms / conditions;
- Prefered customer system – it is a system in place to meet the demand of the products by our prefered customer. Company cannot survive by only relying its distributors.
- Product – it is vital to know the products and its market. Your queries includes;
- are the products consumables or not (for repeat order);
- are the products belongs to below categories or have below features;
- a fad only – temporary;
- a current trend – currently socially in-demand;
- a necessity – a must have product / cannot leave without;
- globally acceptable and will last forever – value in time;
- and probably other related / unique features of the product.
- Compensation – this is vital and very important to its distributors. This is one of the first reason a distributor join the business. Here’s the type of compensation that i knew in the MLM industry;
Binary system – is not good in the long run as it will allow the company to overcompensate (as a result – closure). One of the ways to avoid closure but temporary only is – Pay-ins are limited within the day and implement flushout;
- Uni-level system – if implemented from the beginning (as a culture of the company) is a good sign because this leads to residual income;
- Stair-step system – is a great approach as well. The distributors should work hard though;
- Matrix system – recently exploited by many new MLM company as this involves cycle. Benefits are remain to be seen – maybe good or bad. I dont have much knowledge on this.
- People – this refers to the leaders & support system for the distributors.
company’s effort to support and implement a support system as well as an automated system is a must – as they say, system don’t fail – people do;
- To be competitive in the global market – company should leverage the technology.
- A support system must be in-place for the new distributor to learn the business fast and do the business right – duplication is the key;
- Trainings must be in-placed and available all the time;
- company recognize advertisements as one of the key to support its distributors.
Above list are just my recollection of those MLM company close shops few years back. Of course, same as the recent once.