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By Albert Satre
We have seen that the 60’s were very important for distribution.
On one hand for Network Marketing and on the other hand for
traditional marketing.
Sam Walton discovered that physical distribution was a good
deal, easier and much cheaper than intellectual distribution.
Intellectual distribution requires teaching potential consumers
what the product does and how it can help them.
Sam Walton chose the physical distribution and created
Wal-Mart.
Physical distribution is when people are going to the product.
Everything that applies in a traditional sales organisation
also applies in Network Marketing. It just applies in a very
different manner. Companies still have to motivate people. They
still have to manage people. They still have to pay people
to sell products. They just go about it in very different ways
than in a traditional sales environment.
Two Keys of Distribution MLM:
Product and Distributor:
Products are sold primarly through in-home product
demonstrations, parties, and one-on-one selling. Companies
don’t sell by means of traditional storefronts or direct
mailings or telemarketing or mass media advertising.
The distributor is in charge of his/her own career choice,
he/she can also choose to work part time or full time.
The distributor manages his/her time sheet.
If the company doesn’t pay attention to the needs of its
distributors, they’ll go somewhere else and the company
will fall down. The services a company provides are almost
as important to some distributors as the money they make.
Therefore, the only real difference a company has to offer is
often simply a matter of how much it helps the distributors to
grow, and how much it assists them in building their businesses.
Why Multilevel Marketing is different in the organization?
The distribution of a product now represents 85 % of the
value of goods at retail. All companies try to reduce
the cost of distribution while increasing direct interaction
with the consumer.
The Distribution Chain:
At each step of this distribution chain there are costs
which are added to the price at which the manufacturer sells
the product.
Typically the manufacturer also spends large amount
on packaging to attract the consumer’s attention and
on advertising to create sufficient demand to move the product
off the shelves of the retail store. These packaging,
distribution, and advertising costs represent a very
large percentage of the retail price of the products.
In Network Marketing, two significant differences occur.
First, the distribution chain is simplified because the product
normally moves directly from the manufacturer or distribution
company to the Party Plan hostess to be distributed
to her party attendee customers.
Secondly, it is not necessary to spend large sums on product
packaging and advertising. Most products offered through
Party Plan sales are low in cost, highly demonstrable
and of benefit to most potential customers.
And in Network Marketing, a product is distributed
by a volunteer army of distributors who choose which
markets are to enter or to leave whether to spend
their time selling products or building their organizations
and whether to work part-time or full-time.
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