Do Retail MLM Sales Matter?

Monday, September 13th, 2010 at 11:38 am

Do Retail MLM Sales Matter?

Retail MLM sales are one of the truly critical elements that should be evaluated when considering any network marketing opportunity. If there is not a retail component to the business, you must truly begin to question the true objective. Many network marketing companies find themselves under intense scrutiny, because there seems to be no retail component to the business. When money is only made by the recruiting of others, who pay a fee to join, the line between business and pyramid scheme gets very blurry and very thin.

The other side of the MLM retail coin is whether or not there is a market for the products or services outside of the distributors of the company. In fact, just this past week I was evaluating a company for possible addition to my business portfolio. This company has received a lot of publicity and attention in the past year, that has been bolstered by some of the rising stars who are are building businesses with this company. In the end I decided not to pursue this particular opportunity, because I could not see a market for their product outside of the distributors who were on a monthly autoship program. In fact their products and services could be obtained through other avenues at a much greater cost savings.

In my business I have been very particular about the presence of a strong retail component to the business. I look for companies who have brand recognition and loyal customers, even outside of their distribution channel. In my own business the vast majority of my product sales come from outside of my network marketing team. I have been able to establish a solid retail business in each company that uses a traditional wholesale purchase/retail sale model of operation.

The Legacy of Retail MLM Sales

When you examine the companies with longevity in this industry, you find names like Fuller Brush, Avon, Mary Kay, Forever Living, Amsoil, Tupperware and Shaklee. These business were built on a strong direct sales program, that maximizes the leverage of the network marketing model. These companies do not make headlines for being investigated for questionable business practices and because of this, their names are trusted in the retail market place.

I want to encourage you to use common sense and the mind God gave you when you are evaluating network marketing opportunities. Take a hard look at the “real” business of the company. If there is no money being made outside of “fast start” recruiting bonuses and downline autoships, you may want to step back and reconsider. Although there is money to be made in those types of arrangements, they also tend to be short lived.