A company may start out doing business only in the United States, but it will quickly—usually more quickly than it’s ready to handle—get pressure from its distributors to open operations in other countries. A company must consider the issues that arise when this happens. You can’t know which countries you’ll end up doing business in, so you need to build a framework flexible enough to account for international considerations. This will affect not only product, but also culture and compensation. It is something that every company needs to consider carefully because it touches all aspects of the business.
One mistake that companies make is to assume that once they understand how to compensate U.S. distributors, they can simply replicate the model around the world. This doesn’t work; in different countries distributors have different responsibilities and the company must account for these.
In North America, network marketing has become a virtual subset of the e-commerce industry. This means that once a distributor brings in a customer, the customer buys directly from the company from that point forward. However, this isn’t true in Mexico or South Asia, where a distributor is still involved in physically distributing the product. In those countries, the distributor has much more work to do in servicing the customer and getting the product to them. The compensation plan must compensate for these activities.