“Network marketing fundamentals,” or the s0-called basic skills needed for success in network marketing, are sometimes debated among the top tier network marketing elite, as well as the run of the mill MLMer. This article with pinpoint a surprising twist to this topic and hopefully shed some light on exactly what should be considered a priority.
One of the hottest topics discussed is whether you should focus heavily on recruiting new downline members, or retailing the product being promoted. In other words, should one spend the bulk of their time on recruitment meetings, or should they develop skills sufficient to move massive amounts of product?
The real question should be, are you trying to achieve time and financial freedom, or just earn some extra income? The answer to this question will determine exactly what behavior should be the focus. However, we have to make a pit-stop before when head to this destination.
The first thing needed along the lines of network marketing fundamentals is an understanding that there are actually two types of network marketing organizations: 1.) Wholesale Focused Organization; 2.) Retail Focused Organization
I would probably guess that the majority of network marketers would be shocked to know that there was such a difference, so for the most part they just assumed that all organizations were created equal. So, let’s define each and move on to getting the answer to the primary topic of this discussion.
Wholesale focused organization = buying products at wholesale prices for yourself and getting others to do the same.
Retail focused organization = buying products for yourself and get trained on how to sell products and recruit others to do the same.
When we start talking about “time and financial freedom,” that can be achieved in a retail focused organization, NOT a wholesale focused organization.
The problem that most of us face is that we are promoting “time and financial freedom,” which is the function of a RETAIL FOCUSED organization, but we operate as a WHOLESALE FOCUSED organization by being overly-focused on recruiting people into the business. You can’t mix the two and expect to get the optimum result.
Did you know that most MLM pay plans have stipulation that you must have a minimum amount of personal volume in order to benefit from the compensation plan? This minimum order is usually in the range of $200-$300 and the average network marketer tries to consume all of this themselves (i.e. they get on auto-ship).
The next thing you know, you have a garage full of the stuff!
The basic skills that you need to achieve time and financial freedom are:
1. Purchase the products (if nothing else so that you know your product line).
2. Acquire new retail customers (non-distributors).
3. Teach your reps to do steps 1 and 2.
Imagine for one moment that you bought a McDonald’s franchise with the rights to sell franchises to others. Would you only sell the franchise opportunity and never open your doors to retail the burgers, fries and shakes? OF COURSE NOT! Unfortunately, the average network marketer will only “sell the franchise opportunity” and never attempt to master the marketing and sales skills necessary to sell the “burgers, fries and shakes.”
The big money is in the movement of the retail product, not the opportunity itself. Of all the so called “network marketing fundamentals,” this is the one with the greatest importance.
So, back to the beginning: Should the focus be on recruiting or on moving the products? Clearly you want to do both, but the big money is in bringing on reps and teaching them how to move the product in a retail environment and training others to do the same.
If you want to master the skills of moving massive amounts of products through your organization, go back up to the top of this page and fill out the form just beneath the welcome video. I’ll personally coach you on how to build a massive organization with most effective mlm strategies available. After all, that’s the only way to real time and financial freedom.
-Larry
“Larry Beacham is an incredible leader who has demonstrated his ability to lead and to deliver excellence. He is someone that I would recommend to my mother to work with. He is a passionate go-getter who will help you to become successful in all of your endeavors.” - James Johnson; CEO – Team ONE Marketing
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Yes, I agree. It’s necessary to learn how to bring on reps and train them, and also learn how to sell the products. Both aspects are important. Excellent article! I like the example you gave from a McDonald’s franchise.
I can think of one giant wholesales buyer’s club, that has produced thousands and thousands of six and seven figure earners. Thee is room for both business models.
Great stuff! You explain the concepts very well! I have just learnt something new about network marketing! Thanks
Larry-Awesome article, and I agree with you wholeheartedly. Promoting a wholesale only mentality has gotten a lot of major players in this industry a bad name, because many of the distributors “buy from themselves and teach others to do the same,” but never move into retail profit. The business owners never make the higher dollar amounts shown in the comp plans, because the profitability for distributors comes from their retail business, but this part is not emphasized. Way to take it back to basics!
Kim-I’m curious about which business you are referring to-in the network marketing space, or just a regular wholesaler. If not a network marketing business, aren’t we talking apples and oranges?
Larry,
What a great post! I never stopped to look at mlm from the perspective of wholesale vs retail. The differences in how the two types of businesses operate are important to note. I can clearly see the differentiation. Marketers will benefit greatly by learning to sell both the opportunity and the product. Thank you so much for the clarity.