Category Archives:MLM Startup

Shave Years Off Your Learning Curve At The Direct Selling Symposium

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!100_6124.JPG

Dave Taylor

 

Ask the MLM Expert: "Shipping"

By Terrel Transtrum

QUESTION: With the use of new “dimensional weight” formulas for shipping, how much should we charge for shipping?

ANSWER: Determining how much to charge the MLM distributor (and their customers) for shipping is a tricky question. It really comes down to a business decision; Are you trying to recover your actual shipping costs, should you make a profit on shipping, or are you willing to underwrite some of the shipping expense by reducing shipping costs?

Thanks to Amazon-like tactics, many now expect shipping to be free. However, depending on product mix and more importantly now with product size, shipping can be very expensive.

Man working for shipping company carrying boxesUPS and FedEx now use Dimensional Weight to determine shipping cost. True shipping cost is determined by size and no longer by scale weight. Shipping carriers typically do not fill up a truck based on maximum weight they can carry; they fill up the truck based on how many cartons they can fit on a truck. Larger packages means they need to have more trucks on the road and more drivers. To determine dimensional weight, take the Length + Width + Height of the shipping carton and then divide by 166. This calculated value (called “dimensional weight”) is compared to the actual weight on the scale; whatever “weight” is higher is the weight used to calculate shipping cost.

Because size now matters, it’s important to be efficient on both your product packaging choices as well as packing efficiently for shipping. Our shipping expert Dan Kremers advises that as you determine which products you are going to offer in your MLM company or Home Party company, a larger product will be expensive to ship. People tend to freak out if the shipping cost is almost the same as the product cost.

We have observed five methods that MLM companies commonly use for determining how much to charge for shipping. Each method is straightforward and simple, and there are benefits to each that will support your underlying product and marketing strategies:

  • Free Shipping

    • Using this method, a company absorbs all of the shipping charges. It’s an increasingly common feature in e-commerce transactions, and the obvious way to make this happen is to ensure that shipping costs are absorbed in product pricing. One caution is that where MLM products depend on multiple-times markup, we find that the better practice is to keep shipping out of the product cost and allow it to stand alone, because of its potential impact in the mark-up analysis.
  • Free Shipping when the overall Order value exceeds a specified dollar threshold

    • This method allows a company to recapture a base amount of shipping, and the company subsidizes what it does not recover on larger orders. The argument is that the higher dollar volume (and the margin that goes with it) contains sufficient to boost revenues and volume, the extra shipping cost of which the company is willing to absorb.
  • Flat Rate

    • All orders are charged a flat rate for shipping
  • Tiered Flat rate based on Order Value / dollars

  • Tiered Flat rate based on order weight

The threshold problem with each of the methods described is that an MLM startup may not be able to determine whether they are charging too much or too little. Considering that the decision is in part a marketing decision, as well, the early unknown will also include an analysis of the MLM distributor sensitivity to shipping.

Thus, the key questions will be these:
Are we making / losing / breaking even?
Will the law of averages work in our favor?
How sensitive to shipping fees will the distributors be, and will it affect optimizing revenues?
What marketing considerations should affect our decision?

Actual Cost Shipping

Another method worth mentioning is charging actual cost, which works well when an intelligent system is in place. The system automatically calculates the number of shipping cartons required and the size(s) of each carton based on the items in the order. This will optimize shipping “weight.” Through a direct interface with the shipping system, actual costs will be determined based on your negotiated rates and discounts with the shipper. The cost is then captured at the point of sale and included in the order. Though technologically advanced, this approach is my personal favorite; and the formulas can still add a percentage mark-up (small percentages) to cover not only the actual shipping cost but also packaging and an allocation for labor. In this regard, it becomes conceivable that your pick/pack operation is self-funding if not profitable.

Don’t overlook using USPS flat rate boxes, depending on your product mix. As long as items fit in one or more of the box sizes offered, the flat rate is 100% predictable. With some thoughtful planning, you might be able to overcome the USPS branding that screams much louder than your branding could do on a box. For instance, you might lightly campaign that you are a supporter of the US Postal Service. Simple.

In the end, your goal should be to select the method or hybrid of methods that work best for your product mix, marketing and branding objectives, and shipping budget strategies.

A simple way to determine which method makes the greatest sense is to create a sample set of orders that best represent what you will ship to your distributors and their customers, and then calculate the shipping cost for each order. By running various scenarios, you will begin to see patterns emerge that will help you get real close. Then make your best decision and implement, tracking along the way and refining.

Terrel Transtrum is the founder and CEO of ServiceQuest, the Direct Selling Experts. He and his group are the recognized experts in MLM and Home Party success. terrel@servicequest.com

Why Do You Want To Start An MLM?

WHY you even have a company is more important than the products or services you provide.

“Do you know ‘WHY’ you do what you do? I’m not talking about money. Money is a result of ‘WHAT’ you do, but it’s not ‘WHY’ you do it. What is your purpose, your cause and beliefs that give you and your company a reason to exist?”
-Simon Sinek

Business man pointing to transparent board with text: Why?If we look around, we see problems that can be solved by creating a product that meets those unfulfilled needs. The same is true of all MLM companies. We might think that we can start a company that has a “new” product that will take off rapidly because “it’s the first to do what no one has done before.” We might think that this idea will bring endless profits, or that we will be the leaders in this new-product segment because we were first. But not knowing the true “WHY” of the product or company will ultimately lead to failure.

Companies that create a product or service that flows from “WHAT” that they do typically fail within in a two years of conception and launch. This is mainly because people aren’t inspired by the “WHAT” of anything. If you hire someone to work for you and “what your company does,” he or she will work in exchange for your money.

However, if you hire someone who works for the “WHY,” the passion that drives your company, he or she might give blood sweat and tears for the cause that they are a part of.

The “WHY” might inspire those within your organization to work harder than they have ever worked. It might inspire them to work long hours, to stay up late at night, long after the business day is over, to continue thinking about how they can help make the company better. “WHY” inspires people to love their company, to feel they are a part of it, and to devote their very best to advance the company’s interests.

FROM THE TOP DOWN

If money is your primary driver, neither your managers, employees, customer service agents nor your distributors, consultants and stakeholders will truly engage. A clear “WHY” is engaging. It inspires. It is the fuel behind each transaction, each decision of an independent distributor to get out of bed and go to work for you, and each “extra mile effort” you wish to receive from all stakeholders (including employees).

FROM THE BOTTOM UP

When distributors interact with staff who are not inspired by your “WHY” the experience will be devoid of the light and energy that otherwise could exist. The clues and cues may not be verbally or consciously recognized, but the difference is palpable. It always will be. A good argument can be made that MLM company retention is rooted in a clear “WHY.”

The true key to success that easily stands the test of time lies within this simple truth: “People don’t work for passionately and buy repeatedly ‘WHAT’ you do; they are buying and working for the passion and vision of ‘why you do it.'”

So, why does your MLM company do what it does?

Terrel Transtrum is the founder and CEO of ServiceQuest, the creator of the system for starting and running successful MLM companies called LaunchSmart. Terrel can be reached at 208-520-3895 and at terrel@servicequest.com.

What To Look For In A MLM Startup Consultant

MLM Startup ConsultantI was recently asked, “as an MLM Startup Consultant, will you please tell me how I can differentiate myself in the direct selling market?”

The first thought was that one of the reasons for early business failure is the lack of real differentiation (read: lack of unique value propositions).  Thinking as an MLM startup consultant, I realize quickly there is plenty of noise and chaos by those without uniqueness fighting for the table scraps.  This seems to be a slow killer of direct selling businesses.

Aware of this condition, you can address the true value you bring to the table which is unique and different from others in the marketplace.  The most efficient starting point is at your “why.”  Why are you in business?  Why are you spending time and money to create your business?  If your answer is, “to make profits,” then keep digging.  Otherwise, there is no real differentiation.

When you put a finger on it, eureka!  Bluegreen Resorts starts with their “why” . . . To Share Happiness.  Melaleuca proclaims, “to enhance lives by helping people reach their goals.”  ServiceQuest cries, “unleash and empower freedom!”  This is our why.  Start with the why and discover how the unique differentiator flows from there.

The futurist Simon Sinek reminds us that people don’t buy “what” you offer, they buy “why” you offer it.  As a busy MLM Startup Consultant, I encourage you to start each day of your journey at the starting point—declare your “why” and spend the day building it.

Terrel Transtrum is Founder and CEO of ServiceQuest, a global consulting and training firm specializing in MLM and direct selling.  terrel@servicequest.com

Working With A Qualified MLM Consultant Can Mean The Difference Between Success And Failure

The payback from working with a qualified MLM consultant can mean the difference between success and failure.  The incidence of failure of a new MLM startup closely follows the success / failure rate of small businesses across the USA.

According to the US Small Business Administration, 8 out of 10 businesses fail.  It breaks my heart.  The trend in startup MLM companies is the same, if not even slightly higher in failure rate.  At surface level the primary reason the new MLM startup fails is that it simply runs out of cash.  But the cracks in the foundation start well before the heartbreaking day of financial collapse.

An amazing thing seems to happen when an entrepreneur identifies the great opportunity for a direct selling business: they retreat to a cave!  Some are not in touch with distributors (and their wonderful, quirky demands and needs).  Yet the distributors and consultants (in home party companies) hold the key to success deep in their dreams, behaviors, and values.

Of the best solutions, one is dialogue and the other is a qualified MLM consultant.  From our many years in and around distributor service systems, we are reminded of the question asked by Nathan Furr and Paul Ahlstrom (co-authors of the book Nail It, Then Scale It): “Which would you rather do – talk to customers now and find out you were wrong or talk to customers a year and thousands of dollars down the road and still find out you were wrong?”

The other solution is a relationship with a qualified MLM consultant.  In our circles, there are several MLM consultants that seem to float to the top in qualifications.  This doesn’t mean that those in top web search positions are necessarily the most qualified.  In fact, we have found that some of the very best resources are quite difficult to find because they are in the trenches with their sleeves rolled up.

When looking for a qualified MLM consultant, start with the simple, intuitive questions such as these:

  • Where did you get your start in the world of direct selling?
  • How can I be sure that you are qualified to guide me as an MLM consultant?
  • How many of the global top 100 MLM companies and home party companies have you served?
  • How many MLM startups have you helped, and of those, how many are still in business?

Be encouraged, and move and think quickly.  Nail your business model with the help of a qualified MLM consultant.  Otherwise, you’re in the 80% statistic crowd.

Terrel Transtrum is Founder and CEO of ServiceQuest, a global consulting and training firm specializing in MLM and direct selling.  terrel@servicequest.com

MLM Startups Are Alive And Well

and-i-dont-careMLM Startups are alive and well! In large part because of the eternal optimism of entrepreneurs, and helped along by wide acceptance of creative business strategies in the roller-coaster economy, MLM startups are exciting new avenues.

The breakdown of MLM startups in our MLM consulting practice fall into three groups:

  1. New ventures – these are the startups that are not yet in business and involve the crucial steps of strategic planning, project blueprinting and planning, and early execution.
  2. Emerging ventures – these are the MLM startups that are in business and that have traction; many that we see are approaching or are already at positive cash flow.
  3. New divisions – a surprising number of established enterprises are looking to the world of direct selling, building on the best practices of starting and running a successful MLM enterprise.

The critical path for the entrepreneur thinking of starting and running a successful MLM company begins with the vision and strategic work. From there, the proof of concept flows from forecasting and modeling, then flowing into launch project blueprinting and planning. The smoothest launches always follow a tight action plan and engage the field recruiting system as early as possible. We find that this vital step is often postponed until launch, yet there are some valuable steps that can be taken from the very start.

Entrepreneurs considering MLM startups are happier when they take time to get smart in the nuances of direct selling (MLM / Network Marketing / Home Party). We find that the implementation curve is shorter and more effective when owners and executives have a foundation of knowledge and understanding of the exciting world of MLM Startups.

Terrel Transtrum is Founder and CEO of ServiceQuest, a global consulting and training firm specializing in MLM and direct selling. terrel@servicequest.com

 

Takeaways From Former Harley Davidson CEO At The DSA "Be Smart Conference"

Image Credit: BestBuy.com

Image Credit: BestBuy.com

I had the pleasure of attending the DSA Be Smart Conference earlier this month and had a wonderful time attending the presentations and connecting with some great minds. One of the Keynote presentations that stood out to me was given by a gentleman named Ken Schmidt, former CEO of Harley Davidson. Ken was hired to come in and turn Harley around when they were on the brink of filing for Bankruptcy and losing everything they had spent the last 100 years building.

Ken related any buying experience to purchasing a Flat Screen TV. If you go into Best Buy, you will find a wall FULL of flat screens that you can buy, most of them have very similar features, price points are comparable for a lot of them, and the overall choice is usually not a very clear one.

He said if we get to the end of the wall you will be looking at a SONY for $2000 and a Samsung for $500. Both are the same size, both have similar features, and as you are standing there looking and deciding, a young man in khakis and a blue shirt jogs up and mentions he noticed you eying the SONY.

From there, this highly trained young man proceeds to give you all of the amazing capabilities of the SONY:

Specs: Details: Description:
Warranty Terms – Parts 1 year limited  
Warranty Terms – Labor 1 year limited  
Width 28-7/8"  
Weight 11.1 lbs. with stand (10.6 lbs. without)  
TV Type LED Flat-Panel  
Screen Size Class 32"  
Screen Size (Measured Diagonally) 31-1/2" Size of the screen, in inches, measured diagonally from corner to corner.
Vertical Resolution 720p Maximum number of horizontal lines (or pixels) that can be displayed from the top of the TV screen to the bottom. The greater the number of lines, the better the picture.
Screen Refresh Rate 60Hz This refers to how many times per second a TV screen image is completely reconstructed. A TV with a 60Hz refresh rate means that the picture will be completely rebuilt 60 times in one second. Why is this important? Generally, the more the screen is refreshed, the smoother the images will appear.
Product Height (with stand) 18-1/4"  
Product Height (without stand) 17-3/8"  
Product Depth (with stand) 6-1/2"  
Product Depth (without stand) 3"  
HDMI Inputs 2 HDMI carries both digital video and audio (at resolutions up to 1080p) in a single cable. It provides the highest-quality connection between your TV and Blu-ray players, personal computers, video game consoles and more. The more inputs your TV has, the more devices you can connect directly.

I’m willing to bet that all of you scrolled right past all of the specs that I listed, and not because you are not in the market for a TV, but because specs and details are not sexy. They don’t connect anything to us. Sure HDMI capabilities are important, but I’d like to see you go out and purchase a new TV today that doesn’t have that.

Here is the point: Humans have NEVER made a purchasing decision using our BRAIN, instead we use our GUT, and what makes us feel good, important, validated, powerful, awesome, welcome etc… When someone asks you to make a final decision we don’t say “I’ve evaluated the facts and decided that I will choose the SONY. Instead we say “I FEEL good about the SONY”… Why? Because we all know that when our friends come over to watch the game they will say “WOW… Nice, and it’s a SONY.”

Ken went on to explain how Harley creates disciples, not customers. Brand Ambassadors are not just owners. This is done through something he called "Visible Passion and Enthusiasm." He explains how contagious this is and that people become Visibly Passionate and Enthusiastic by having their own chance to share their story (Which is really your story that becomes part of them through their own personal experience). And here is the kicker in all of this: People love to talk about their favorite person in the world… Themselves!

People want to say “Look at me!” “Notice me!” This is why Facebook and all social networking works. People say look at me, and even more exciting, people validate it and say “I like that”. The result is dopamine, and people are addicted to it. So where all of this is leading to is that in order to differentiate your company from all the other companies out there, the story has to resonate with people in their gut. As you get to the heart, and don’t worry about the head, you will unlock success for your company.

Ken closed with this: “What is the message that you want them to share, and how are you going to get them to share it?”