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Fear of Loss Drives MLM Business

Nov 22, 2007
It's like something out of Shark Week on the Discovery Channel. A feeding frenzy of professionals from every MLM in the industry staking their claim on what might be the fastest growing network marketing company in the industry and it hasn't even launched yet. As a person that teaches large corporations how to grow and develop, I'm fascinated about what we are witnessing first hand. What is driving these professionals into a panic mode?

The name of the new network marketing company is called XLRevShare, a start-up that is officially launching on Jan. 1, 2008. XLRevShare has developed a viral marketing system that revolutionizes how MLM reps market their business. The product is virtual, so all of the usual manufacturing and distribution costs are added back into the profit margin. This allows a very low start-up price of only $150 and a monthly service fee of $25.

By reviewing the XLRevShare case study, we can learn three valuable precursers to a successful MLM launch:

1. Select an innovative product or service that has broad appeal. Lotions, pills and potions are being oversold and commoditized within the MLM industry. The industry is ripe for products that can enable and grow MLM companies or bring value to large groups of general consumers.

2. The ability to make money by leveraging an existing client base or network. The quickest and least expensive sale to make is the one to an existing client. The most expensive and longest sale to make is one to a stranger.

3. Fear of loss. When the product or service has a low barrier to entry and the attributes listed in #1 and #2, the possibility of great success creates a sense of fear. Given the nature of an MLM compensation structure, the difference in one week could mean the loss of thousands in commissions.

The lure of big profits and rapid market penetration causes more an more businesses to attach their product or service to an MLM distribution model. At the same time, there is a disheartening among the business community because these companies appear to be clones of one another. Top line members from one MLM break off to form another company selling almost the same product. This commoditization of the business model can only have adverse long-term effects on the perception of consumers.

As with any industry, innovation drives growth. It's time to step outside of the model of replication and focus on delivering real value. If MLM companies can re-invent themselves or their products and services, they'll not only have a booming launch but also an opportunity for long-term success.
About the Author
To learn more about XLRevShare, Click Here
Brett Nordin is a business consultant and entrepreneur with a passion for various business topics including sales, marketing and business development.
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