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The fact is, certain kinds of products are suitable for network marketing and others are not. Traditionally, network marketing seems to work best for products that require: 1) some but not extensive education and training, plus 2) a lot of motivation and/or support.

Teaching consumers how to use products and services typically builds a cadre of committed consumers. Distributors require some education in order to, for example, hold a successful home decorating party, but such training generally requires only a few hours a month. Often, MLM companies assume the task of education and training consumers so distributors can concentrate on motivation and support.

Products for which motivation and support are vital are beauty, diet, and health products. These types of products require this because there are so many choices available, consumers often have difficulty making selections. To interest prospects in a product, distributors should make arrangements to introduce them to someone they can relate to who’s been successfully changed by the product. So many worthless products in the MLM arena have come and gone, potential consumers are wary of trying yet another unless it has the endorsement of someone they trust.

A product is suitable for MLM if it’s a new product or falls into a new category that people are not yet familiar with. A network marketing company may build its success on a product/product line because it doesn’t have general market acceptance. Innovative products have often used the MLM venue to enter the market. MLM products often represent a great leap forward in some way that calls for one form or another of consumer training. Often, prospective customers don’t even know why they need them! Distributors make people aware of the value of these products and educate them in correct usage. Often, a recommendation from a friend will help them make the decision to purchase it.

Obviously, there’s no reason to build an MLM company to distribute a run-of-the-mill toothbrush. Anyone can walk into a store and purchase one, not to mention the free one the dentist gives you when you get your teeth cleaned! Your mother or dentist has already taught you how to use a toothbrush. You don’t need a distributor to bring one over and demonstrate it. A product about which the consumer already has all the info he/she needs is not suitable for network marketing. A product that the consumer can pick up on any casual trip to the grocery store or to the mall is not suitable. You need to sell a product with differentiation—something that makes it stand out from other products.

Most MLM companies market products their people believe in and feel proud of. When someone says to me, “The product a company sells doesn’t matter,” I wonder if that individual is pitching a scam because, of course, the product does matter! Legitimate company founders want to contribute to the welfare of the society they live in by selling products that have real value.

Intellectual Distribution of Product

The book, The Next Trillion, by Paul Zane Pilzer provides an overview of the economic realities responsible for the explosion in product sales via direct sales during the past thirty years. The book introduces the concept of intellectual distribution, which is one of two elements of the sales process: 1) physical distribution and 2) intellectual distribution.

The process of physical distribution is simply getting the product into the hands of the consumer. On the other hand, intellectual distribution requires teaching potential consumers what the product does and how it can help them. In other

words, intellectual distribution is education.

This concept is core to understanding why MLM has touted such explosive growth in the last thirty years. Throughout history almost universally, sellers educated consumers about products sold. Such is no longer the case. Beginning in the 1960s, Sam Walton discovered that physical distribution was a good deal easier and much cheaper than intellectual distribution. He, therefore, chose to ignore intellectual distribution and concentrated on lowering the cost of physical distribution. As a result, he stopped selling products that required intellectual distribution, creating Wal-Mart, one of the largest corporations in the world. This approach gave rise to the “discount superstore,” a concept that decreased the cost of everyday items, but also decreased the outlets for innovative, new products that required intellectual distribution.

What about products that require intellectual distribution? Some products are simply not intuitive, are too new for people to be comfortable using on their own, or require consumer assistance. Given the ever-growing number of new products that require motivation, education, training, and support, it became essential to carve out new channels of distribution or expand old ones. Network marketing, of course, is one of these channels.

Because intellectual distribution represents the best opportunity for network marketing companies and their sales forces to succeed, I have created what I call the METS Formula (Motivate, Educate, Train, Support):

Motivation. For some products, such as diet or health products, distributors may need to spend time motivating consumers to start using them and to stay with them.

Education. Why is your product better than competing products? Why should consumers spend their money on it rather than on the many others out there? Or, why do your consumers need this product at all? Education about product is essential to a company’s success.

Training. Some products require training for the consumer to use them effectively.

Support. Some products require ongoing support from the distributor for the consumer to know how to use it.

In my experience, the products or services that are best suited to network marketing require one or more aspects of the METS formula.

It is important to understand how much time must be spent on motivation, education, training, and support (METS) to sell a product to the average consumer because it affects your earnings. The more time and energy it takes to make a sale, the more money the salesperson can expect to make. This means that less money will be available for sales leader commissions.

Are you wondering what products and services don’t work for network marketing? Typically, with some notable exceptions, insurance, financial planning, and computer sales have not worked well. Why? Because the parts of the METS formula you need most in order to sell these products are education and training. Markets and products are changing rapidly; a salesperson has to spend so much time obtaining the knowledge necessary to provide education and training that it becomes impractical to have part-time distributors do it. Often, these kinds of products require licenses for those who sell them, and part-time distributors don’t typically have time to invest in this kind of intense training.

Over the years it has become increasingly clear to me that it’s important for distributors to learn the basic concepts of the MLM business because these individuals invest their heart and soul in building a downline, often working night and day for years. I believe that if distributors understand these concepts--like the role of the MLM product--they can make better choices about the companies in which to invest their lives.

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