There is more than one distribution model for buying and selling products and services. How do you like to sell? How do you like to buy?
- Bricks and mortar. (Retail and wholesale physical outlets.)
- Direct Sales
- MLM (Multi-level marketing) or Network Marketing.
I would be glad to hear about any other ways that you know of. In the meantime, lets look at the differences and similarities of these models.
- All provide a product or service.
- All are legitimate methods.
- All create “jobs”. (Some may be self-employed)
- All offer opportunities for personal growth and development.
- All contribute to a growing economy.
- Product and service distribution.
BRICKS AND MORTAR
Businesses that set up in physical locations are commonly referred to as a “bricks and mortar” business. These are most commonly retail and wholesale operations and personal or business to business service providers. I can’t say I have heard of anything less than $50,000 unencumbered cash to get started in some years now.
- Lawyers; Doctors; Dentists; etc.
- Salons and spas; auto repair; plumbers; electricians; etc.
- Grocery stores; Car dealers; Electronics stores (Future Shop, Best Buy); etc.
- Marketing firms; Print shops; Management consultants; etc.
More often than not, these companies have a top down, pyramidal management structure. Sometimes the roles all fall to one person! You will rarely see direct sales companies, MLM or Network Marketing companies with a bricks and mortar location outside of their head office. There are some exceptions.
Some companies are purely internet based. eBay for example has a physical office for administration but don’t have a location that you can walk into to do your shopping. Starting your own internet business from scratch will require specialized skills and a fair bit of cash for servers, software, internet services and so on.
Most distribution channels will use the internet for marketing. Some will have call centres where you can talk to a real person. These companies still have a top down structure. Others may combine Direct Sales models or Network Marketing with their Internet marketing efforts.
- Mary Kay,
are direct sales companies. Products and services are typically sold through home demonstrations and you have the ability to build a team under you. You will likely be paid on the productivity of your direct team but not much further down. If you stop selling, your income stops with it.
MULTILEVEL MARKETING OR MLM
Are you looking for a business opportunity that requires little cash outlay or specialized skills to get started? Opportunity knocks! The greatest advantage to Multilevel Marketing (MLM) is the opportunity for personal development and the opportunity to learn while you earn.
I would suggest the greatest challenge is choosing companies and products that fit you. Like any companies and franchises, there are bad and good opportunities. You still need to do your due diligence in choosing your business partners.
MLM’s are different in that they recognize the importance of the front line sales people.
Although the MLM structure is very similar to most corporations, the treatment of people and profitability for business partners is very different. You are treated as a business owner, not an employee. You are paid as a business partner, not an employee.
You are paid:
- To learn,
- to sell,
- to lead,
- to teach.
When you have built a solid business, most MLM’s with a solid service or product, will pay you for many years after you stop “working”.
WHAT IS YOUR PREFERRED BUSINESS MODEL
All of the above models are legitimate. Your job is to find something that fits with your “Why” and then decide how to deliver your product or service to the marketplace. The only “right” answer is the one that fits you and your budget.
You may want to consider taking baby steps. Robert Kyosaki does a great job of talking about this in “The Business of The 21st Century” and in “Cashflow Quadrant.
I love that old saying: “Life is a journey, not a destination”. I would suggest that if you don’t like roller coasters, don’t go into business!
Make it a great day,
What are you thankful for today?