Why would a “distributor” begin their career with a network marketing company and expect the grand goal of their discount being the profit they will make? If you work for a traditional corporation, do you view the discount they offer on their products to their employees as part of their income? “Most distributors view what they can earn as a vitamin discount, not as a path to profits.” -Fred Cooper Executive VP, USANA. Do you agree with the above quote off of one of Kim Klaver’s blogs?
Walmart, JCPenny, Target and almost every large company in the world gives employee discounts. They are a benefit, but certainly cannot be viewed as compensation. While Joe has three kids and uses his company discount frequently, maybe Mary is high school student and rarely uses hers. It can’t be included in the compensation fairly.
Do you consider an up-front MLM Company discount as part of your salary? When a company gives a very reachable upfront discount on their products, they are taking the first step of setting the business builder up for long-term failure in my opinion.
Do network-marketing distributors expect a product discount? Of course they expect the discount because that is how most MLM Companies operate. What is the problem?
The business model drives the behavior in the field. The plan many companies have in place for retail customers turned distributor in name only to receive 20%, 30% or 40% hurts the people who really want to build a business. The retail customer benefits, and the company definitely benefits with this option. The retail customer sells to others at their cost, but how do the business builders, especially the part-timers benefit? It is great for the customer, but it creates a saturated market of people buying wholesale for themselves, their friends and family causing the person who tries to make a profit appear greedy.
The network-marketing company needs to have a plan for people only wanting to be a retail customer and then a plan for building a business. The network-marketing company has profit built in to the product, so imagine how much the company is charging for the product if they are giving a 40% discount to a distributor.
In Advocare International’s case, once you reach your sponsors same 40% discount level; the network-marketing company then pays the personal sponsor, but it is a very small portion as compared to what they were making before their customer became a business partner. The network-marketing sponsor has to go recruit more customers to replace that income. If the new 40% off distributor is not a business builder and only purchases $200 per month for personal use and some family and friends use, sponsor’s income is cut drastically. The winner… Advocare International and many other network-marketing companies!
It is next to impossible for most network-marketing distributors to sell their product at a 40% profit to their family and friends. Most people will sell the product at their cost. Can you sell your Mother something for $10 when you paid $6? There must be changes in the MLM industry if everyday people are going to succeed.