Launching a new Direct Selling Company (home party or MLM) and getting it off the ground can be a very complex and difficult process. Especially if you’re doing it on your own. Unlike many things, the world of Direct Sales is not something that you can just YouTube and find easy-to-follow tutorials on how to effectively build and grow a Direct Selling Company. There are many areas that must be considered, such as building your compensation plan (and keeping it legal), training your field, compliance, legal, your sales pitch, how to motivate your sales force, recruiting, retention, logistics, what software are you going to use, how do you keep a balanced budget, communication with your field, customer service, social marketing, and the list goes on and on. The best practices for each of these disciplines is truly unique for the world of direct selling. Much of what drives the peculiarities is the fact that your products will be demonstrated and sold by an army of independent field sales reps – who will make a decision each day whether or not to work their business and stay with your company.
Because of these complexities, only 20% of all direct selling startups are in business after one year. The other 80% have failed in their attempt to launch. However, what we have found is that if the entrepreneurs will take the time early to learn and follow proven best practices and processes for starting and running a direct selling company – that success rate is as high as 80% still in business and growing after one year.
We want more successes and less failures! We’re sure you do to! Failures are bad for the industry and leave thousands of independent sales reps’ dreams laying in the wake. Successes breed confidence and good will in the direct selling industry and help independent sales reps reach their dreams and aspirations. To increase success rates – YOUR success, we have brought together in one place, at one event, the industry’s leading experts in these different fields to educate you on Best Practices of Starting, Building, and Growing your Direct Selling Business.
The Direct Selling Symposium is a place of education, learning, and mentoring – and includes front-of-the-room instruction as well as individual coaching sessions. It is NOT a time when services are sold – in fact it is prohibited. Whether you’re an entrepreneur starting from scratch or leveraging your existing business by diversifying into the direct selling space – attending the Direct Selling Symposium will shave years off your learning curve, and dramatically increase the likelihood of success. We look forward to seeing you there!
MLM International markets and Party Plan international strategies are tricky. Global frontiers afford fertile opportunities for companies that are forward-thinking and who will pay the price of preparation. A strong, well-formed international growth plan will dramatically increase your success rate; long-range risks and opportunities are far too great to not properly plan. “A step at a time” is the appropriate mantra, and for most companies it is important to first develop a working model in the United States or country of origin.
Mastering the marketing plan, establishing the operations and service infrastructure, refining product formulations and service delivery systems, and fine-tuning support technology are best accomplished in a central location, followed by duplication and adaptation in foreign markets as the core operation gains strength and stability. Importantly, distributors who first focus their efforts in one market are categorically more effective and successful than those jet-setters who need a reason to travel the globe but who never settle down long enough to build anything lasting.
Conventional wisdom is to progress from the United States to Canada, Europe, Australia, Asia, Mexico and South America, Pacific Rim, China. Many believe that the Internet has made international expansion an instantaneous business. But be careful since the legal and business requirements of going international have not kept up with the Internet and technology.
To help provide a starting point for your personal research, the following summary from the LaunchSmart™ System covers the most common MLM international planning elements that are common to both the basic and advanced levels of planning.
MLM International Planning Checklist & Key Considerations for Party Plan Companies
- Corporate and foreign lawyers with expertise in direct selling
- Continuity throughout your world-wide system
- Trademarks and service marks
- Consumer legislation and variations from country to country
- Earnings claims and presenting the MLM offering or party plan business
- FDA issues varying widely from country to country
- Product compliance, manufacturing, and ingredient standards
- Intellectual property (patents, formulations, software licenses, etc.)
- Immigration when sending key employees
- Language restrictions for labeling and literature
- Banking and movement of monies into and out of countries
- Currency exchange rates and strategies
- International sponsoring, qualifications, seamlessness
- Customs and tariffs, transfer pricing
- Taxation, subsidies, value-added taxes
- Corporate form, local residence, independent contractors, employees
- Manufacturing and supply agreements; local production; trade secrets & formulations
- Marketing literature, distributor agreements, buy-back policies
- Advertising, claim testing, market reception, brand development
- Antitrust and trade regulations, restrictions on pricing, relationships with suppliers
- Political considerations and opportunities
The world is open for business to MLM, network marketing, and party plan companies. Worldwide revenues now exceed $110 billion generated by 59 million distributors and consultants, according to the Direct Selling Association (DSA) (www.dsa.org). Some of the largest and best direct-selling companies produce more of their revenues outside of the United States than inside our borders.
Each country has its own unique set of rules, challenges and opportunities. Some of the companies that have pioneered international MLM and global Party Plan business have taken decades to discover and refine the process. There is absolutely no need to make the same mistakes!
When to go international for your company requires a careful look at a variety of issues that include the following:
- Which method(s) of entry will work best for your company?
- Which legal, tax and business issues demand your attention?
- Do your products require registration?
- How do logistics and distribution best support your model?
- Are you prepared for fast growth?
Methods of Entry
MLM, network marketing and party plan companies enter foreign markets through different methods and avenues, some of which include the following:
- Joint ventures and in-country partnerships
- Licensing and supply agreements in the international arena
- Establishing a presence in the foreign market
- Combinations of these
One company was heard to say, “Canada is just like another state. No big deal.” The executives decided to work out details in time to receive products that they boxed up and shipped into Canada. They felt extreme pressure from distributors who had begun recruiting and pre-enrolling on promises of fast action by the company. Without a clearly defined expansion plan, the company took the proverbial “ready, fire, aim!” approach to entry into Canada. Sadly, but all too common, that company was soon stonewalled, no doubt because of its cavalier attitude toward expansion, and it now faces challenges and staggering expense to both backtrack and undo the harm as well as to do it right going forward.
Some countries allow MLM companies and Party Plan companies to send products across their borders provided that they are consumed by those who receive them and not resold. This model is sometimes referred to as “Not-for-Resale” or “NFR” and is supported by import laws that allow products to come into the country “as is” with labeling and formulation from the originating country. This method creates an opportunity to test market a product and to gradually build a base of product users upon which the company can expand.
Perhaps the most important lesson learned over the years is that the NFR approach is not intended (not permitted) by foreign governments to be a channel for circumventing registrations and compliance with their various regulations and laws. By carefully following the rules for NFR, you have the best chance to keep open the important doors through which your company can pass for a longer-term welcome into the country. As a practical matter, executives should ask the threshold question about NFR: does this country permit NFR sales? Not all countries are open for business to NFR sales by MLM and party plan distribution and sales systems.
Legal, Tax and Business Issues
Taxation and legal considerations should be foremost of the considerations. There exist proven, effective, and unique tax and legal strategies that require constant updating but that can make or break years of success for your company as it attempts to glide into the global markets. Each country has its unique set of requirements and peculiarities, and overall strategies for global expansion allow for effective launch and profitable growth.
One of the wisest strategies employed by several of the very best companies, learned the hard way, is to time global expansion to coincide with the fulfillment of the company’s overall growth objectives. In other words, as a company approaches, for example, $300 million in US revenues, it is poised to open key foreign markets that will contribute to the company’s 8-year growth trend, showing steady, solid growth. In these cases, the companies will exchange short-term flash for longer-term stability. Of course, the aggressive builders advocate that the better approach is to have it all at once. And some succeed at it.
Product registration ranks in the top three questions to ask of your decision team. Most products must be registered with local ministries and health departments before they can be introduced into a market. This is especially true for foods, cosmetics, nutritional supplements and many personal care products. Armed with an understanding of the regulatory environment in a target market and a willingness to comply and jump through designated hoops can protect your company from legal and regulatory actions, potential financial penalties, or even permanently closed doors in a given market. Imagine the disappointment and financial impact when an MLM company or party plan enterprise has an international door closed, locked and bolted and must move past that market. For simple reference, product registration can take several years but as a general rule should take 3 to 6 months when it is approached correctly.
Logistics and Distribution
Logistics and distribution for global MLM and party plan deliveries is unique among countries. Unlike the United States, most countries do not favor use of credit cards as the preferred method of payment, requiring alternate forms of payment for orders and starter kits. Not surprisingly, physical delivery addresses are sometimes not available, and the local method of delivery is a drop point where payment is exchanged and product is picked up.
These are two examples that should challenge you to think through the level at which you cannot assume that what is working in the United States will automatically work in a foreign market. In Mexico, for example, a prominent US company supports distributors who serve as remote distribution centers from their homes and who purchase product inventories and then resell the product at retail to their local clientele. This model, and variations of its kind, allow product to be sold and distributed where reliable services do not exist for collecting cash payments or for product delivery. On the other hand, however, growth and expansion can be limited in these regions and the company does not collect data on customers to track retention and activity.
In countries such as Singapore and Hong Kong, regional distribution centers can be used for warehousing and distribution, bulk storage, and variable labeling for fulfillment on demand to support multiple countries from a central distribution center.
For reference, logistics and distribution will take up to 6 months to arrange, sometimes shorter or longer. As with many services, the more a company commits in up-front capital and/or ongoing fees for speed and accuracy obtained through the right MLM international consultants or party plan distribution services, the investment can save time, money and aggravation in the long run.
With mounting pressures to be everywhere, company founders and entrepreneurs find it difficult to follow the discipline of proper planning and structured launch into international markets. MLM and party plan international growth has been like a barn on fire for some companies, creating magnificent wealth and momentum for many.