Downline.com

In any MLM or network marketing businesses, distributors would have their own strategies at earning maximum income as soon as they understand the marketing plans. Ambitious distributors would go all out to make personal sales and sponsor as many new downlines as fast as possible.

One of the ways distributors go about their MLM business is accumulation of rewards that allows him to save up purchase products and accumulate point value in order to reach the next rank as easily as possible. So a distributor can purchase products with the point value that he needs to push his ranking up. Should he need 10,000 points to go from 5% to 10%, he can purchase products of 3,000 points in the first month, 2,000 points in the second and 3,000 points in the third month. Let’s see the pros and cons of   this sales strategy by some distributors.

Advantages of Front Loading

• It gives the distributor their own time frame  to move from one rank to another giving them less pressure and less stress
• Volume gained from sales in previous months doesn’t get flushed away. This means you can gather the volume, go away on a 3 month holiday, and you can start immediately again as though you haven’t left.
• Protected against the effects of demotion in ranking.

Disadvantages of Front Loading

• With Accumulation, the distributor is encouraged into what is called Front Loading – which means he decides to buy tons of products to meet his target faster. Indirectly, he is buying his position up the rank faster instead of really going out to promote or sell the products or recruit downlines who in turn do the same in order to earn his commission. The danger in doing this is that the products would just sit in his house and not move on to customers. He does not then earn on retailing them. He does not promote them to people who might even like them and buy them repeatedly. He would definitely be in no position to use or consume all the products himself.
• When there is no time frame, the distributor is not pressured to deliver. But given such an easy- going method of earning the income, the distributor will not have the incentive to go out to look for sales or recruit downlines.
• If there are no repeat sales in the business, the business organization is hollow. Most people stop buying or recruiting once they hit a new level in an accumulation system. This becomes unhealthy and products are not moving out to downlines or customers. In other words, since there are no quotas, you can have 10 Super Diamond Ambassadors in your organization who don’t buy anything.

Normally a person is a user or consumer of the product of the network marketing business. He may want to join as a distributor because he is a regular user or consumer and believes in the product. Then he might decide to join the business and introduce the products or business to other people too and earn some money.

It is advisable to educate your downlines on the correct approach in developing the MLM business with the right strategies. Short cuts like accumulation or front loading and buying position should be discouraged. As a leader, you should encourage your downline to be regular users or consumers of the products in order to be convinced of the quality of the product. Then only can you or the downlines be able to convince customers to buy your products.

Products that have a high consumption rate or repeated sales like health products or skin care products are usually targeted. It is common knowledge that repeated users or consumers would like to join in the company to enjoy distributor or cost prices of products.

Believe that repeat sales are what keep a business running long term.

In addition to having good repeat sales, you must also focus on enforcing an 80/20 or 70/30 rule where 70-80 percent of the products purchased by a distributor should be sold to customers and the remainder 20-30 percent is used for personal consumption. By doing so, accumulation would not happen, front loading strategies would not work for distributors who are only interested in short-cuts to reach higher rankings in the compensation plan. Also he would only be able to earn fast bucks on a short term basis only.  A network marketer should be trained right from the beginning when he signs in that he should look at the long term benefits of the business.