Even before the explosion of the great crisis of the credit sub-prime my interests and concerns as well as the search for new professional incentives have led me to a profound change in my career for which I gave up the tranquility of the “job” at a significant Italian bank bought not many years ago from a large French banking group. This finally leads me to participate at the end of 2009, to the master’s Executive Marketing & Sales management admission selection process. A new area that I felt emotionally close to me and moreover at the ESADE business school one of the most prestigious in the world.
In addition to that to supplement my income sources I dedicate myself to develop something new and fascinating as well as very challenging the Multi-Level Marketing or MLM. On this occasion, I got to know many people so here I have the opportunity to recount the experience of an Independent Distributor which in many ways is similar to that experienced by most of his colleagues in this sub sector of the Direct Sales.
In various conversations Giovanni Masoni1 tells me that in 2011 he was looking for a new job opportunity, unfortunately, in a period of crisis where the unemployment rate was on the rise and where surely increase considerably the average time of the research phase.
One day while working on the terrace of a café near Milan he entertains a conversation with a regular customer who spoke to him at the end of an interesting and profitable business opportunities.
Intrigued by the words of Mr. Valter Istria they begin to talk and he tells him about a MLM business belonging to the Direct sales industry, its incredible compensation plan and finally concludes that the activities of Independent Distributor is in collaboration with Amway.
The company Amway offers an ample set of commonly used products belonging to different merchandise categories known as FMCG (i.e. Fast moving consumer goods).
Here the main points of interest are the chances to start your own business as a Independent Distributor substantially with:
- Reduced costs of start-up
- Repetitive reasonable costs for the purchase of commonly used products
- Direct commissions for the sale of products to friends and family
- Indirect commissions for the sale of products made by Distributors recruited in the business by yourself and so on, which in theory can imply an exponential profits growth.
The promotion begins with the sponsorship of Valter Istria and then start collecting some standard and simple presentations available in print and in pdf file format to distribute them over the Internet where it is basically told:
- the history of the enterprise,
- an exposition of the compensation plan and
- a list of the various merchandise categories.
In order to have a broad vision of the new business he also participates in a convention of an entire weekend open to all distributors, which are normally organized several times a year, where they present substantially different success stories and new products soon to be released on the market. An event certainly very scenic with the clear purpose of stimulating a sense of excitement among all Distributors present.
And finally, he also participates in several study days which are periodically organized by the company on the different merchandise categories as well as periodic meetings organized by an Independent Distributor of intermediate rank, in particular, to keep always involved all Distributors beginners.
Finally in the Direct Sales all start promoting the products offered by the company to friends and family.
Here the difficulties were different and in particular:
- merchandise categories almost totally unknown (e.g. cosmetics) regardless of the quality of the products and their competitiveness.
- The choice of the target audience was a key aspect. Of course many of her friends may entertain a presentation on cosmetics with a potential customer more effectively deepening the themes on the characteristics of the product, its quality and the Adequacy of money.
- The small average return of a little more than hundred dollars per month2.
After about 6 months of your involvement in this activity he had achieved ridiculous results which do not even cover the cost. He clearly came at the time you want to re-think the choice made.
The business sector interested him. But in September of that year given the situation he was highly sensitive to evaluate new opportunities. Clearly his profile on social media remarked his professional interests in multi-level marketing, and in fact he was contacted on Linkedin by Paolo Mele who was an Independent Distributor in collaboration with ASEA and he was running the business as a part-time job.
ASEA with a product in the category of dietary supplements and in this case it is the only company with the patents for the production of a liquid solution of redox signaling, a highly innovative field of medical science that deals with the cellular rejuvenation.
He takes part in a presentation organized several times per month to engage new Distributors and he was fascinated by this new technology in the medical sector in which the company was the only one who have the necessary patents.
Even here the difficulties were different and in particular:
- very innovative sector, lack of knowledge as well as the low receptivity of the market
- compensation plan unprofitable in comparison to that of other companies.
About one year later the Networker at higher levels given the low profitability of Networkers in relation to the level covered in the organization they evaluated the alternatives and close to the middle of August is operated a blitz that is a true migration of nearly a thousand Networkers , accomplished in a matter of weeks.
Kyani is a supplier focused on a single product category the dietary supplements that are widely known and accepted and additional advantage of extreme importance is that the company redistributes to the channel a considerable margin.
The target audience in the sector of Sport the Wellness and bodycare is finally closest to him.
It seems that everything is ok because he finally has found an interesting combination of:
- product category
- target audience
- the compensation plan
But despite the visible and substantial changes the lack of real passion and enthusiasm as well as the little commitment led him to believe he had not yet found the right business idea that goes perfectly with his interests and skills so that he can glimpse more clearly the foundations of his successful business initiative.
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The author: Ing Lanfranco Colella, Digital marketing manager
Business development in salud2bienestar.com and he participate in the Affiliate Marketing Program of NEURS.
He has interests in the Digital market, Social media and Word-of-mouth Marketing
1 This is the story of the experience of an Independent Distributor similar to many others, however, the names of the characters are fictional but the companies involved are real.
2 Multilevel marketing or ‘pyramid?’ Sales people find it hard to earn much by Jayne O’Donnell, USA TODAY