| If you are considering starting any new business | | | | of the representative, it is the company that handles |
| venture, or getting into MLM/Network Marketing in | | | | them. Instead of buying products, investing in training |
| particular, you owe it to yourself to read this article -- | | | | programs (books and tapes), attending conferences |
| particularly if you are a newbie. | | | | and suchlike, the Cooperative Marketing rep simply |
| These days, most people are familiar with MLM | | | | buys lifetime profit sharing rights to existing |
| Network Marketing. However, most have never | | | | customers. It is the company itself that does the |
| heard of Cooperative Marketing. Those that aren't | | | | marketing, acquires the customers, sells to them and |
| may find the content herein to be shocking and | | | | services them. This is nothing less than the difference |
| amazing, if not revelatory and potentially life-changing. | | | | between starting a business that may or may not |
| Cooperative Marketing has been around for a long | | | | succeed, and having a profitable one. |
| time in the mainstream business world, but it is | | | | In this regard, the representative is really more of a |
| relatively new to the "home-based business" world. | | | | business partner whose funds help defray the costs |
| The term can mean many things, but in general it | | | | of R&D, marketing and customer acquisition/service |
| means that the retailer is receiving marketing | | | | for the company. In return, the representative |
| assistance from the manufacturer, supplier or other | | | | benefits from being in business with a successful |
| large-scale enterprise. Such advertising "co-ops" are | | | | company. In short, the company does all the "heavy |
| common in many brick-and-mortar industries, including | | | | lifting," and the rep reaps a share of the rewards. |
| the grocery, insurance and publishing businesses. | | | | By being able to obtain profit sharing rights to |
| In the case of a home based business, it means the | | | | existing customers, the rep's job is enormously |
| company you are working with is taking on a major | | | | simplified (not to mention immeasurably improved). In |
| burden that normally would fall to you: the marketing | | | | fact, in some Cooperative Marketing companies, the |
| of the product. In fact, the better Cooperative | | | | lucky rep is not even required to actively build the |
| Marketing companies do much more than this, | | | | business -- though this is of course encouraged! This |
| including actual selling, distribution and customer | | | | means that one does not have to sell, recruit or |
| service. To date, only a relative handful of companies | | | | sponsor in order to succeed! By comparison to the |
| use this business model (compared to the hundreds | | | | poor overtaxed MLM/Network Marketing rep, the |
| of MLMs out there). | | | | Cooperative Marketing rep can simply sit back, relax |
| More's the pity, because a growing number of "work | | | | and take care of an existing, thriving business. |
| at home" authorities consider it the far superior | | | | COOPERATIVE MARKETING CHARACTERISTICS |
| business model -- both for the companies in question | | | | - Company produces the product, sells direct to |
| and for their individual representatives. Though the | | | | consumers (reps can sell as well) |
| two business models have many similarities, they are | | | | - Company does the marketing: finds and sells to |
| more clearly defined by their differences, which are | | | | customers via traditional means (print, TV, etc.) |
| explored in this article. | | | | - Company does the warehousing, shipping, delivery |
| MLM (MULTILEVEL MARKETING)/NETWORK | | | | and handles returns |
| MARKETING | | | | - Company does the customer service (though rep |
| As you probably know, the MLM/Network Marketing | | | | may help too) |
| business is a huge industry. Many household names | | | | - Company does the continuity: mail, email and even |
| (Amway, Avon, Mary Kay, Herbalife, Shaklee, etc.) | | | | phone support (rep can too) |
| have had tremendous success using this business | | | | - Company does the "recruiting": places new reps into |
| model, and many thousands of representatives (also | | | | existing reps businesses (!) |
| called associates or distributors) have built profitable | | | | - Company does the training (though rep may help |
| businesses in the industry. A smaller but still sizable | | | | personally sponsored) |
| number have built successful enough businesses to | | | | - Size of business only limited by profit sharing |
| live very, very well indeed. | | | | commitment over time |
| The MLM/Network Marketing business is based on | | | | MLM vs. COOPERATIVE MARKETING: OTHER |
| the idea that reps are responsible for just about | | | | CONSIDERATIONS |
| everything in their business, other than producing the | | | | The Cooperative Marketing business model |
| product and handling commissions and bonuses. The | | | | recognizes that for the new representative -- who |
| company does these last chores, while the | | | | most likely has no background in sales, recruiting or |
| representative must undertake tasks which many | | | | marketing -- the best use of his or her time is in |
| find difficult and even onerous. | | | | doing something that is easy, direct and natural. |
| First, reps must find their own customers. Second, | | | | Conversely, the MLM/Network Marketing business |
| they must find new people to join their businesses | | | | asks new reps to engage in a long, difficult process |
| with them. This is known as building a downline, and | | | | of learning new skills and doing things many (perhaps |
| great success in the industry is predicated on having | | | | most) people do not like and are uncomfortable with. |
| a large and thriving one. Specific business plans vary | | | | These include the "most obvious" ones: recruiting and |
| from company to company, but generally speaking | | | | selling. In addition to all that must be learned and |
| you will not reach the top of the leader boards by | | | | mastered, the typical MLM/Network Marketing rep |
| selling alone. Third, reps may be required to order | | | | may be additionally burdened with product |
| certain minimal levels of product every month, | | | | warehousing and delivery, attendance at meetings |
| warehouse those products, distribute them, handle | | | | and training events, travel to same, additional ancillary |
| returns, etc. | | | | costs for training and travel, and much more. |
| While it is true many people have had great success | | | | The Cooperative Marketing model asks new |
| in MLM/Network Marketing, it is also true that a far | | | | representatives to simply work with existing |
| greater number have had little or no success. The | | | | customers. It is a perfect fit, because this is the one |
| plain truth is, not everyone is cut out to be an | | | | thing that is not only difficult for big companies to do, |
| entrepreneur of this type and/or is willing to make | | | | but virtually impossible. At the same time, as |
| the necessary commitments and sacrifices. It takes | | | | mentioned before, it's something most people can do |
| time, patience, money and lots of hard work. Beyond | | | | with little or no training. The reps main job is simply |
| that, not everyone who gets started in the industry | | | | building and maintaining personal relationships. And |
| is suited to its business model, which requires a | | | | since the new rep is playing in a "warm market" (with |
| tremendous amount of social network building and | | | | existing happy customers) instead of in a cold one, |
| maintenance, among other things. | | | | there is considerably less stress and no brutal learning |
| MLM CHARACTERISTICS | | | | curve. |
| - Company produces the product: reps must sell it | | | | MLM vs. COOPERATIVE MARKETING: CONCLUSION |
| - Rep does the marketing: must find customers and | | | | The Cooperative Marketing business model addresses |
| sell to them | | | | all the aspects of MLM/Network Marketing that are |
| - Rep does the warehousing: must often buy large | | | | so problematic for most people. By allowing the |
| quantities of product, store and deliver them, and | | | | company to do what large companies do well, and |
| handle returns | | | | allowing individuals to do what they are good at, a |
| - Rep does the customer service | | | | natural synergy occurs that is best of all possible |
| - Rep does the continuity: must keep in frequent | | | | worlds for all concerned (including the customers). |
| touch with customers to keep orders coming in | | | | While MLM/Network Marketing reps are scrambling to |
| - Rep does the recruiting: must personally find and | | | | learn all that they have to learn -- at the very same |
| sponsor people for downline | | | | time they are trying to prospect and sell as well -- |
| - Rep does the training: often involves hand holding, | | | | the Cooperative Marketing representative simply |
| pep talks and panic calls at 3 A.M. | | | | enjoys the benefits of partnering with a large, |
| - Size of business limited by ability to recruit and/or | | | | successful company. Instead of taking on the |
| controls put in place by company | | | | considerable financial and time burdens of building a |
| COOPERATIVE MARKETING | | | | business from scratch -- not to mention all the |
| As stated, the home business version of the | | | | associated risks -- the Cooperative Marketing rep |
| Cooperative Marketing business model is actually quite | | | | simply "piggybacks" on success and reaps the |
| different from MLM/Network Marketing, though there | | | | rewards. |
| are surface similarities. This probably explains public | | | | This article has shown the glaring differences |
| misconceptions and confusion. For instance, in | | | | between MLM/Network Marketing and Cooperative |
| Cooperative Marketing companies, one can sell, | | | | Marketing. They are considerable, and the conclusion |
| sponsor and build a downline. The lingo and terms | | | | plain for all to see. Will Cooperative Marketing |
| involved are, in many cases, identical. However, it is | | | | ultimately doom traditional MLM/Network Marketing? |
| at this point where the similarities end, and the | | | | It is hard to say. Much depends on whether new |
| superiority of the business model begins to become | | | | companies are willing to adopt the business model. |
| clear. | | | | But one thing is absolutely sure -- Cooperative |
| In Cooperative Marketing, instead of the the majority | | | | Marketing is clearly the superior home business |
| of necessary business tasks falling on the shoulders | | | | opportunity for all concerned. |