Direct Marketing VS MLM
When I first fell in love with multilevel marketing years ago it wasn’t simply the business compensation plan that caught my eye. This particular MLM offered products that people needed to buy anyway. They weren’t trying to sell something that wasn’t necessary.
Those products not only saved money because of the way they were produced, but proved to be ahead of their time in terms of being ‘Green.’
The In Home Meeting
This is when the team leader would turn the presentation page over and list the advantages:
1. Save money over the cost of products you already use.
2. Save the environment with eco-friendly products.
3. Earn money selling these products.
4. Earn money using these products.
5. Build a network of distributors to build residual income.
This is only a partial list, but you get the point.
The Birth Of A Business Model
Manufacturing companies made a decision to allow home business entrepreneurs exclusive rights to distribution. Rather than placing a superior product on supermarket or department store shelves, they chose privately owned distributorships.
More companies began doing the same thing. A wider variety of goods became available when manufacturers realized the potential of this business model.
Once people realized they could save money buying at wholesale, or just above wholesale prices, they didn’t have to think long about buying everything through their home business. Multilevel companies started to attract more volume by allowing people to become ‘members’ rather than full fledged distributors. These members were potential distributors who helped advertise even if they never became business owners.
Shipping companies began to flourish and network marketing began to show its potential for boosting the economy. Multilevel marketing showed great potential for growth, but that growth began to take its toll.
Is This My Home Or A Department Store?
People were using their homes as storefronts hoping to earn full time incomes. The volume of goods shipping into and out of homes was wearisome. Trying to keep inventory was difficult. These business owners needed a solution.
Drop shipping appeared on the horizon and everyone scratched their heads wondering why nobody had thought of that before. Distributor’s and member’s orders now shipped from the warehouse directly to them. The up-line leaders still received their compensation. Homes were homes again without inventory or cash registers.
Hold On… It Gets Better
Then came the internet, and everything changed again.
Everything got better. The introduction of auto-ship meant that people didn’t have to remember to reorder products they needed regularly. Orders didn’t need to be placed by a certain time during the business week.
The internet also meant that MLM crossed that thin line that used to separate two distinct marketing groups. Most people don’t think about things differently, especially if they’ve been doing them for a long time.
Two Worlds Collide
When multilevel marketing companies began giving distributors their own websites, this allowed them to begin direct marketing campaigns. They were able to drive customers directly to their web site for sales, membership or distributorship.
From a business standpoint, for MLM business owners to build a substantial income, they need to develop a network of distributors. From a marketing perspective, they now have the ability to develop their downline network, using direct marketing techniques.
Close But No Cigar
Marketing professionals who move high ticket items have little to no interest whatsoever in ‘selling soap.’ They want to clear six figures each and every month. They also want to build a network, but they want highly motivated entrepreneurs interested in clearing six figures each and every month.
Direct marketing is sometimes social in nature. That option is usually available. Even if someone is moving real estate from halfway around the world, they can pick up a phone and talk to their prospect.
Multilevel marketing communities usually represent one big happy family. As they continue to recognize the advantages available to them thanks to the internet, they’re likely to get even bigger and happier.
These two types of businesses will never merge because they serve very different purposes. They can share marketing strategies and remain worlds apart. The entrepreneur however, finds themselves in the unique situation of being able to have their direct marketing company and MLM too.