Death of Traditional Autoship in Network Marketing Companies If you have been operating a network marketing business for more than 3 months, I do not have to tell you that there is a thing called autoship.
Most traditional network marketing companies require their distributors to sign up for it. This means that in order for you to be in a position to earn money marketing that company’s products, the distributor must purchase a set minimum dollar amount of the company’s products each month.
In return for participating in autoship, you usually gain some advantage. It may be reduced pricing on the products that you buy. Network marketing is not the only business model that uses automatic shipping or automatic purchasing of products. Any recurring bill is a form of autoship. Cellular service, auto insurance or any other product or service you regularly receive and pay for can be considered autoship.
It is a double edged sword within the network marketing framework. The theory is that you are purchasing products that you are getting good value from. However, in some cases you end up paying a very high price for something that you could get for a much lower price. For instance, MonaVie requires their distributor to purchase a quantity of bottles of juice that retail for about $40.00 but depending on how much you buy, the price could drop. However even with the volume discounts, Men’s Health did a study of Mona Vie and found that their juice did not provide any more nutritional value than a bottle of Welch’s grape juice. Hardly a good value.
How does all of this shape up for a person running a network marketing company? In essence their challenge is to create enough cash flow to break even on any start up costs and cover their monthly expenses which would include their required monthly product purchase. This can easily extend into hundreds of dollars each and every month before any income is realized. There are new companies cropping up whose business model does not eliminate autoship, but it structures the compensation in a way that allows what amounts to the same thing, to be paid from earned income.
One such company is call MPB Today. A simplified explanation of their compensation and autoship model is such that you are required to make 2 sales and help each of them make two sales. At that point you would cycle. What happens then is you receive $500.00. This is $125.00 from each person on your second line. The company will then pay you $300.00 and take $200.00 toward the purchase of your next product. If you do not cycle, you are not required to make a purchase to stay in the game.
There is no pain involved with this. You will not find yourself going into debt, or using your savings to maintain your business autoship.
Another company that is approaching autoship from a different direction is Infinity Downline. This company offers access to a library of audio and video training resources for popular software titles as well as general network marketing. There is a traditional monthly product purchase involved but it is only $25.00 and the business owner breaks even on their first sale because there are no admin fees ever. All sales are paid directly to the business owner by the consumer. This puts you in profit by your third sale. This is because there is a 2 up feature wherein the system automatically pays your 2nd and 4th sales to your sponsor. All subsequent sales are paid directly from consumer to sponsor.
As more people become disillusioned with autoship, which is a major reason why the average network marketer only lasts about 65 days. Two monthly recurring orders without any monthly income signals that it is time to quit.
The market place always has a strong influence of the direction of business. As more people tune in to network marketing only to find that they do not like having an additional monthly expense in addition to the other costs of doing business, more companies like these will begin popping up.
I believe this is signaling the death of traditional autoship in network marketing companies.
Of course the second most obvious reason for failure in the industry is lack of marketing skills. Anyone involved or considering getting involved in this industry should seek marketing training first then decide on a company or product. After all, network marketing is a marketing business and friends and family will not be enough to support your business.