[nabentre] major changes in network marketing

[Mary ellen]

I'm writing to pass along information on major changes in network marketing
in general and in the company Nikken in particular.  I'm also offering an
unabashed commercial for our product line and for the concept of supporting
blind entrepreneurs when doing so is practical.  

 

My purpose is not to ignite the pro and anti network marketing passions.  I
intend merely to inform people of some exciting changes that dramatically
increase the effectiveness and ethics of the network marketing industry.

 

When I say increase the ethics I am not agreeing with the notion that
network marketing is a crooked industry.  Although there have been some
unscrupulous people in the industry, the concept as it is correctly
understood is straightforward.  The difficulty has been that the concept as
practiced by some, by no means the majority, has been corrupted and has not
always been ethical.  Those few unethical practices have damaged the
reputation of the industry as a whole.

 

Here is my personal reaction to changes brought about by the Federal Trade
Commission.  I think the changes are healthy for the industry and create a
better opportunity for the development of genuine businesses while
decreasing the prevalence of what some call "netwish marketing."  Netwish
marketing is the notion that investing a few dollars in what is called a
business means that one actually has a business.  I believe unrealistic
expectations and unduly optimistic hype from excited network marketers has
helped create the "netwish marketing" atmosphere which has damaged the
reputation of the direct selling industry as a whole.  Please understand
that I accuse no one of falsification, and I do not accuse the concept of
network marketing as a whole.  I believe the changes coming about will help
focus attention on the genuine business of network marketing.  Fewer people
will have businesses, but those who do will likely have more profitable
businesses.

 

After that rather long and labored introduction, here are some of the
changes.

 

It will now be required that companies have at least 51% of sales coming
from people who are not enrolled in the network structure.  Although
reputable companies have always had a 70% rule stating that 70% of purchases
from enrolled business builders be either personally consumed or sold at
retail, the requirements will be that at least 51% of sales go to honest to
goodness retail customers.  Many companies have encouraged every customer to
become a distributor in the hope that they would refer friends and become
genuine distributors themselves.  That practice is changing.  Now companies
are encouraging distributors to do a better job of distinguishing between
people who are really running a business and those who just want a wholesale
price.  

 

In the past, the "wholesale" price would more realistically have been a
retail price. My husband distributes products and is building a sales
network for the company, Nikken, which has just substantially lowered its
prices.  In many cases, the current retail price is the same or lower than
the former wholesale price.  Prices are now roughly equivalent to products
of similar quality that can be found in health stores.  The difference is
that, rather than driving to the store to pick them up, the ordering process
is on line with drop shipping.  Customers who don't live near a retail
health store or who don't want to be bothered running errands will
appreciate the lower prices and the convenience.

 

Our company is strongly encouraging everyone who becomes a distributor to
develop a customer list of a minimum of ten people.  (We currently have more
than double that number and our customer list is increasing rapidly.)
Distributors are now only recruiting those with a genuine interest in
running an actual on line retail operation.  This change will eliminate the
objection, "If everybody is supposed to sign up, where are the customers?" 

 

It used to be that a new distributor could achieve rank advancement, and
higher commission percentages, by purchasing products.  Now rank advancement
can only be achieved through genuine retail sales.  Some companies, (I'm
proud to say that Nikken was never one of them), were encouraging new
business builders to purchase a sales inventory.  Those who didn't sell that
inventory had boxes of products on hand, sometimes for months or years.  Now
distributors will only get paid if they sell a certain amount of product.
They will still receive commission on their personal purchases once their
sales quota of one hundred dollars of retail sales a month has been met, but
no credit for rank advancement.  In Nikken, any distributor wanting to get
paid commission will be required to do a hundred dollars of retail selling
in a calendar month.  If one is running a genuine business, requiring sales
of a hundred dollars in an entire calendar month is a trivial requirement.
Any business that does not generate a hundred dollars of sales volume a
month is not a business.  As the Nikken president put it, "If you open a
restaurant and you're the only customer, you don't have a restaurant, you
have a kitchen."

 

Correctly understood, network marketing offers an individual the opportunity
to create a sales business part time with a relatively low investment.  It
is a genuine business.  To make it work, marketers do need to market their
products, not just the opportunity.  Network marketing is distinguishable
from other retail direct selling situations because a marketer can recruit
and train a sales force and that sales force can recruit and train a sales
force and so on.  Marketers who also become trainers and help others develop
their own businesses are paid for doing the training.  Those who concentrate
on retail sales are paid straight sales commission.  Those who purchase
products and do little or no sales are rightly defined as customers.  

 

I believe the changes in the industry are helpful because signing an
application no longer gives a person the right, or the dillusion, to call
him or herself a business person.  That designation is only earned when
actual sales volume is created.  If you don't have retail sales, you don't
get paid.  There is no insentive to sign up everybody and their dog in the
hope that somebody who wants a product or two will suddenly become the
Diamond Jim Brady of sales.

 

Network marketing can be lucrative for people who build a customer base and
recruit genuine business people to do the same.  It can offer a few hundred
extra dollars a month to people who just want to refer friends to good
products and do a little retail selling every month.  Network marketing
companies provide high quality products, more competitively priced since
these changes.  The idea that the person who gets in first makes all the
money and the ones that come in later are stuck at the bottom of the pyramid
was never true for reputable companies.  That notion is even less true now.
The industry is now structuring things so that anybody who wants to do the
work can build a retail business and anyone who is so inclined can build a
genuine sales force.  Nobody can coast.  It is easy for a new marketer to
out earn his or her sponsor.  I know because we did so.  When one enrolls is
irrelevant.  Compensation is based on work.  It has always been that way for
genuine network market opportunities; the new changes increase the clarity
and sharpen the distinction between customers, retail business operators,
and those who recruit, train, and develop a network of entrepreneurs.

 

I understand that everyone on this list is already involved in one form of
business or another.  My purpose has never been to lure people away from
what they're doing and get them to "join my deal."  I have always thought,
however, that blind people should, whenever it is a reasonable thing to do,
support one another's businesses.  It isn't always convenient and the mere
fact that a business is owned and operated by a blind person shouldn't be
sufficient reason to dump longstanding business relationships to become the
customer of a blind entrepreneur.  However, when all else is equal, I
believe we should support one another.

 

So, if you're in a position where all else is equal, here's our web site.
If it works for you to buy your nutritional supplements and/or magnetic
products from us, we welcome your business.  I also would be happy to
patronize your businesses, again, if all else is equal and the purchase
makes sense to me.

 

Here's our web site if you want to explore.

 

www.nikken.com/paulgabias