What mistakes can you avoid by hiring a professional direct selling consultancy?
The most common misconceptions among the people starting operations deploying the MLM (Multilevel marketing) compensation plans in India and the world over which we encounter as a direct selling consultancy (For companies deploying the MLM compensation plans)
- "I have been a distributor/employee- for other direct selling companies and can start a company !"
- Reality: More often than not the field sales force have no idea of the resources and infrastructure required to support a direct sales business, they have a narrow view of the field sales activities and are generally the reason behind most new start-ups fail in the first couple of years.
- The business appears to be successful in a short period of time.
- Reality: Some may get lucky, however, it is best to look at a minimum of a 3 to 5 year investment period and 6 to 9 years to gain strong homegrown field leadership and a company culture that will drive the business to higher levels.
- Not running a new compensation and success plans against real organizational structures to ensure payouts are feasible within the overall budgets.
- Reality: What looks good on paper needs the acid test of reality otherwise the company will be headed for bankruptcy even before they start!
- "We are a 'ground floor' opportunity that is better than an existing direct selling company ".
- Reality: This is a misnomer and it will only attract a 'grass is greener' direct sales butterfly that jumpsfrom company to company, rarely achieves much and then moves on to the next opportunity. Little do they realize that they are up against companies with decades of experience and expertise, global seamless business opportunities, large ranges of products and so forth...
- Attracting other company’s leading direct sellers.
- Reality: This is another fallacy, yes they may get lucky and attract a big fish, however, this is highly unlikely and those that come to you will want up-front money to join - also a cause of early failure.
- "My competition is other direct selling companies"
- Reality: The products today compete in the wider market-place against all products available via traditional retail models and e-commerce portals in the same category.
- "Anything sells in direct selling"
- Reality: If people in your network are purchasing things not used by them and selling the same to other people – sooner or later the Failure is imminent.
- "More commissions=more business= more profits"
- Reality: Surely a loss making idea and won’t last long.
The above mentioned misconceptions have caused and are continuing to cause massive damage to the image of our direct selling industry by creating confusion among the public and the government authorities.
This article has been written by the Direct Selling Consultant Daniel R Pranjal who heads Strategy India (www.strategyindia.com), which consults companies promoting products and services deploying the Multilevel marketing (MLM) compensation plans.
Strategy India weekly evaluate 20 operations deploying the MLM compensation plans and list the unviable ones as a scam on www.strategyindia.com/blog/scam-alerts. The scam list has exceeded 1900 in 600 days.