A few months ago a very well played April Fool’s joke had a lot of people on their heels regarding the announcement that Monavie and Vemma had merged to create a new company. Many people were all abuzz initially trying to determine exactly how this would affect them, what compensation plan would prevail, how the downlines would merge, etc… Everyone quickly realized that they had been duped by the prank, but the initial chaos surrounding the announcement was fun to watch anyway.
The reality of this magnitude of merger in the industry is not very far from what I feel the future holds in store. I believe that in the upcoming years many companies are going to realize the benefit of consolidation within the network marketing industry, much the same way that they have in traditional business. To remain competitive and viable the MLM companies need to find ways to optimize overhead and manufacturing costs. But more importantly the MLM companies need to find ways to shore up a diluted distributor base. The network marketing industry need to realize that they must find ways to attract and retain their distributor base, which has become a monumental challenge.
Donald Trump, while pitching his Trump Network, has spoken repeatedly about how he believes and sees consolidation as a necessity within the network marketing industry, and I have to admit that I agree with him on this. One of the unique things in the network marketing industry, unlike just about any other industry, is that no one particular company commands more than a 5% market share. There are currently just slightly over 200 companies that are registered with the DSA (Direct Selling Association). In fact another interesting statistic is that the number of network marketers in 1980 is no different than the number of network marketers in 1991, 2004 or 2010. What we seem to do is to recycle the same marketers over and over.
The rampant spread of the “new program of the week” mentality that the internet has helped to foster has done little to advance the perception of the network marketing business model. While there are 200 or so DSA member companies, you can find 100’s and 100’s of less than legitimate opportunities being pitched at …and further diluting the finite distributor base on a daily basis. Consolidation in the network marketing industry would strengthen the distributor base within the legitimate companies by presenting a wider product line, increasing sales and thus diminishing the marketer’s tendency to be on the constant lookout for the next bigger better deal.
The distributor must always keep in mind that they must first and foremost focus on building “their business”. The reality is, that by the very agreements we sign with the MLM company, we are little more than 1099 employees, and at the mercy of the whims and decisions of that company’s management. The best defense in this market is a strong offense. Build your MLM company, but make sure you are building YOU at the same time. Regardless of what happens to or with a particular company, no one can EVER take YOU away. And be prepared for consolidation in the network marketing industry, it is not a matter of if…but when. For the sake of the entire industry let’s hope for sooner than later.
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~Jack Kapala
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Jack,
I couldn’t agree more. BTW, great blog. I will be back for more to see what you have for us.
Nice work.
Tripp
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