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There are two business models that pose the greatest threat to retail: One surprising and misunderstood by most, the other predictable and also misunderstood by most. The first is multi-level or network marketing, and the second is online retailing. Letâs look at what the future likely holds in store for each of them.
Network Marketing
Network marketing (often called MLM, short for multi-level marketing) as we know it today began, for all practical purposes, in 1956 when Dr. Forest Shaklee started the Shaklee Corporation, and two childhood friends, Jay Van Andel and Richard DeVos, founded what later morphed into the Amway Corporation. Since then, network marketing and its sister profession, direct selling, have grown steadily in acceptance and sales. The business has survived the pyramid schemes, chain letters, and money games of the seventies and eighties and emerged as a serious player. Right now MLM companies are moving fast and breaking things to the tune of $28 billion annually in the United States and $117 billion worldwide.
The skepticism that surrounded the business for so long has been replaced with acceptance. Millions of people have become involved, mainstream media has started to notice, and there are lots of proven results to offer. American business magnate Warren Buffettâs Berkshire Hathaway now owns three companies in the business, and he has been quoted as saying that, dollar for dollar, itâs the best investment heâs ever made. Thatâs quite a statement for someone widely considered to be the most successful investor of the twentieth century. (And for those of you keeping score at home, I just referenced both Buffetts in the same chapter!) Although popular folklore says the Oracle of Omaha and the Minstrel of Margaritaville are related (and they call each other Cousin Jimmy and Uncle Warren)âtheyâre actually not. Although as Fortune magazine noted in a 1999 piece, both play stringed instruments, stick to their guns, and are filthy rich!
Besides me, other financial and success authors like Robert Kiyosaki and David Bach have been recommending the business for years.
The Golden Era of Network Marketing
Now, we are about to enter the golden era of network marketing.
In the next few years alone, tens of millions of new distributors will join the network marketing profession. And as much as companies like to suggest they are heading for an exponential growth curve, when sales increases are almost vertical, itâs likely the profession as a whole will experience that growth cycle. There are lots of indicators and trends suggesting this will be the case.
First, we need look no further than the current broken model of retail distribution today, with all its needless parasites between the manufacturer and the consumer. Contrast that with the elegant model of network marketing, where the company that manufactures a product ships it directly to a distributor. This person is often either the end consumer or someone who conversationally markets it to family, neighbors, and friends. (And if you donât know how this works, you havenât been on Facebook lately!)
The money that retailers of the regular retail model normally waste on advertising and unnecessary layers of distribution is instead spent on product research and development (R&D) and sharing the profits with those who actually do the work and provide value.
Network marketing is the ultimate results-based compensation, because itâs a business where people are paid exactly what theyâre worth.
The other big advantage of network marketing is the social aspect. MLM is like social media on steroids, in 3-D and living color! Every product is presented along with a personal testimonial from someone you know and trust. Itâs done in small home meetings, one-on-one encounters in coffee shops, and through friend networks on social media sites.
Itâs for this reason that many health and nutritional
There are two business models that pose the greatest threat to retail: One surprising and misunderstood by most, the other predictable and also misunderstood by most. The first is multi-level or network marketing, and the second is online retailing. Letâs look at what the future likely holds in store for each of them.
Network Marketing
Network marketing (often called MLM, short for multi-level marketing) as we know it today began, for all practical purposes, in 1956 when Dr. Forest Shaklee started the Shaklee Corporation, and two childhood friends, Jay Van Andel and Richard DeVos, founded what later morphed into the Amway Corporation. Since then, network marketing and its sister profession, direct selling, have grown steadily in acceptance and sales. The business has survived the pyramid schemes, chain letters, and money games of the seventies and eighties and emerged as a serious player. Right now MLM companies are moving fast and breaking things to the tune of $28 billion annually in the United States and $117 billion worldwide.
The skepticism that surrounded the business for so long has been replaced with acceptance. Millions of people have become involved, mainstream media has started to notice, and there are lots of proven results to offer. American business magnate Warren Buffettâs Berkshire Hathaway now owns three companies in the business, and he has been quoted as saying that, dollar for dollar, itâs the best investment heâs ever made. Thatâs quite a statement for someone widely considered to be the most successful investor of the twentieth century. (And for those of you keeping score at home, I just referenced both Buffetts in the same chapter!) Although popular folklore says the Oracle of Omaha and the Minstrel of Margaritaville are related (and they call each other Cousin Jimmy and Uncle Warren)âtheyâre actually not. Although as Fortune magazine noted in a 1999 piece, both play stringed instruments, stick to their guns, and are filthy rich!
Besides me, other financial and success authors like Robert Kiyosaki and David Bach have been recommending the business for years.
The Golden Era of Network Marketing
Now, we are about to enter the golden era of network marketing.
In the next few years alone, tens of millions of new distributors will join the network marketing profession. And as much as companies like to suggest they are heading for an exponential growth curve, when sales increases are almost vertical, itâs likely the profession as a whole will experience that growth cycle. There are lots of indicators and trends suggesting this will be the case.
First, we need look no further than the current broken model of retail distribution today, with all its needless parasites between the manufacturer and the consumer. Contrast that with the elegant model of network marketing, where the company that manufactures a product ships it directly to a distributor. This person is often either the end consumer or someone who conversationally markets it to family, neighbors, and friends. (And if you donât know how this works, you havenât been on Facebook lately!)
The money that retailers of the regular retail model normally waste on advertising and unnecessary layers of distribution is instead spent on product research and development (R&D) and sharing the profits with those who actually do the work and provide value.
Network marketing is the ultimate results-based compensation, because itâs a business where people are paid exactly what theyâre worth.
The other big advantage of network marketing is the social aspect. MLM is like social media on steroids, in 3-D and living color! Every product is presented along with a personal testimonial from someone you know and trust. Itâs done in small home meetings, one-on-one encounters in coffee shops, and through friend networks on social media sites.
Itâs for this reason that many health and nutritional
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