Every year, there seems to be brands using a multi-level marketing business model, or as they call it, direct selling.
This is where people sign up under distributors, and then sign up other people under them. This creates chains where the profits flow from the bottom up.
The more product sold, the more commission. The more people you sign up under you, the better the returns and incentives usually.
Is it worth the effort, or are you better off putting all that time and money into your own business?
Now before we get further into this, let me be transparent. Me and my partner have been involved in a few of these ourselves, including Herbalife, Global Prosperity or GAZ and Enagic. We are no longer involved with any of them. Why?
My personal view on them changed. For many, the groups these brands create are amazing and they strengthen each other with positive and motivational content. Unfortunately, I believe this is only skin deep as everyone involved is there for one thing – the bottom line.
The bottom line is creating a sustainable business that can be run from home.
Similar to franchise models, you usually will need to pay a monthly or yearly subscription to their platform access or brand. Next, you will need to either spend no money on advertising and contact all your friends to try and buy in, or… You bite the bullet and go all in creating content like reviews and product updates, and sharing when you go to meetups and seminars and all that fun stuff.
You advertise the brand and lifestyle, or at least, the one you are dreaming of.
What I do want to share with you is that if you are putting in all this time and money, why not invest it in yourself instead?
These days, starting your own business and creating an online presence is easier than ever. There is so much self help content online, and there are even Facebook groups and real life get togethers to help you out.
Why spend money boosting your up-line, when you can create a profile of your own. Profit margins can even be higher whilst selling less expensive products. But what products do you sell?
Sourcing products these days is easier than ever, and I recommend searching for products in the niche you are looking to get involved with. Herbalife for example is focused on shakes and nutrition, sports drinks and beauty. Why not find some similar products and create your own brand?
Jump onto Google now and type in the product you want followed by either ‘whitelabel’ or ‘private brand’ and hit search.
You’ll usually see a heap of distributors who can sell you products and allow you to label and sell them under your own brand. Booom. Hello your brand!
Now some of you might not want to keep an inventory of products in your homes. This is where it is worth finding a distributor who offers direct to customer freight or dropshipping. This allows you to pay the distributor for the product, they will invoice you, and then send the product without a receipt to your customer directly. No double handling or extra freight charges.
BUILDING A BRAND
One advantage of joining a franchise or MLM is that all the branding has been done for you. In our case, we’ll need to do this, but it is not as difficult as you think. You may even enjoy the process.
You need to decide on a few things first.
Where are you going to be selling your products?
Who is your audience?
What colours and look appeal to that audience?
Can I create a logo and business name myself?
You can get a lot of this online, from DIY and buy now logos, to audience research and strategies to get in front of the right audience.
I recommend looking at other brands in your industry or field of choice, and looking at their branding, how they come across on socials, and what their web presence looks like.
Other things to consider are your startup costs and legalities.
In Australia, we need an ABN or Australian Business Number. This is free. You can also register a trading name against your ABN. This is under $100.
Once this is done, I would look at your web presence.
A good hosting package can be found for under $50 per month, and you can connect it to a domain name (web address) for under $50 for two years too.
This will allow you to setup a website, emails and even an online shop. Do your research to see what hosting package and company best suits your business model.
If you were just looking at a shop, it might be worth looking at a platform like Shopify instead of the web hosting.
For email, you might want to look at Google’s Gsuite so you can easily access it across your devices.
Are you going to collect email addresses? Check out Mailchimp.
What about sales funnels? Do you know what they are and want to use them? Try Clickfunnels instead of a website.
STOP SELLING TO FRIENDS
The best part about creating your own business, is that you aren’t stuck selling to friends circles, or convincing people to signup on your landing page to see all the benefits, or watch teaser videos or webinars.
You are a real business that can market to the world any way you like, and the money you spend and make is up to you. No limits.
For brands starting up, I highly recommend starting with social media to build an audience. It will help in a few different ways.
Firstly, your content has the capability to reach a massive worldwide audience, and you can start running advertising within platforms like Facebook, Instagram and YouTube to reach even more.
Secondly, once you start getting an audience or following, you can start analyzing the data to better understand who they are, and what they are responding to most.
Creating your own brand can lead into so many new directions for you, and I believe gives you more opportunity to grow.
Direct selling brands, MLMs and pyramid schemes do make some people very rich, and unfortunately, there is always going to be losers that put the effort in but don’t see results.
Business success is a model. You can follow it, create it and grow it.
So before you jump in to one of these brands, or sign up under a friend, do consider your other options. Are you ready to invest your time and money into it?
Book a free strategy session with DriveSocial and discuss your goals and options to sell online.
We’d love to hear your comments on direct selling, multi-level marketing and ecommerce options. Leave a comment below, or a question 🙂
*This article was written by David Walter, serial entrepreneur and founder of DriveSocial.