The direct sales industry is on the rise. I’m approached every day by people looking to enter the direct sales market with a startup company. Here at InfoTrax, we launch an average of three startup companies every month and due to the growing main-stream acceptance of direct sales, I expect the trend to continue.
Starting a direct sales company, or any company for that matter, is never easy. There will always be unforeseen issues, unexpected costs, and unruly personnel. These types of issues are not unique to your company. The business gods are not picking on you for any particular reason; you will simply have to be prepared for anything to happen.
At InfoTrax, we have launched hundreds of direct selling companies on our software. Year after year, I see companies face struggles that could have been avoided. Watching the growth of these companies has taught me that every company should answer three questions before they launch: 1) What exactly is your product, and does fit in the direct sales space? 2) Do you have someone at the lead with Direct Sales executive experience? 3) Do you have capital to fund the project?
Multilevel Marketing is big business. There are dozens of companies (including Infotrax) that sell products and services to MLMs new and old. My company has been supporting companies in the industry for decades. I have seen a lot of companies start: some fail some succeed beyond their wildest expectations, and many others fall somewhere in between.
Evolving distributor motivations
As a company grows, the needs and motivations of the distributors it attracts change. Just as companies are started by entrepreneurs, the first distributors who join a company are themselves entrepreneurs. However, as a company becomes more established, it attracts distributors who are more conservative, more risk adverse.
Yesterday Jason Elrod, founder and CEO of Disrupt Worldwide, LLC. made the following announcement on his Facebook wall.
We have been informed that a former Disrupt affiliate had apparently been soliciting people to give him money in exchange for a purported “share equity” investment in Disrupt.
Our investigation proved that the allegations were accurate and the affiliate was immediately terminated.
Disrupt is not selling any ownership interest or stock and has not authorized the resale of any ownership interest by this former affiliate or any others. Disrupt did not receive one red cent of investment money from this individual.
Disrupt takes all regulations seriously, and if our legal and compliance staff feel this action is grounds for regulatory discipline we will file a complaint against the former affiliate with the appropriate authorities, in our home state, the affiliate’s home state as well as with federal regulators.
If you are solicited by anyone purporting to represent Disrupt for investment purposes, immediately report any person who claims to be selling an investment or ownership interest in Disrupt to the the following: firstname.lastname@example.org
It was not a surprise to me, as I had been following the saga all weekend long. Elrod had reached out and shared his side of the issues. I then reached out to Kingston to get his side of things.
Over the last nine months or so, I have been privileged to see the formulation of what is now being hailed as the “World’s Premier Network Marketing Training System.” At first I was not fully convinced, but as the months went along and I had the privilege of sitting down with the founders, listening as they shared the blueprint of what they were building, I soon realized that not since ProSTEP has there been a system which focused on the average home business entrepreneur, and not just the top performing sales leader. Click below and watch the Go Major launch video!
I wrote and article over at BeachsideCEO.com asking this question and sharing some additional information on how brandjacking aka subterfuge marketing may land a personal in civil and criminal court by using these blackhat marketing tactics.
Over the last couple of years GenY aka Millennial Generation has become a focus point for the continued growth of the direct selling aka network marketing aka MLM industry. Now I see Wallstreet and main stream media asking if specific companies are manipulating this generation.