Q: What is the number one key indicator of profitability in the Direct Selling Industry?
A: Industry margin spent on marketing.
(In other words, the percentage of profit (margin) that is commonly spent by the manufacturers in any particular type of business (industry) to advertise (market) the product that they produce.
Products that rely heavily on marketing to be commercially viable have the greatest potential for return for direct sellers because direct sellers are marketing agents. Opportunity is proportional to the perceived value of any given resource. If an industry places a high value on marketing (by spending a great deal of money on it) and I'm a marketer then I have an opportunity to be of high value to the industry (and therefor get paid very well for my results) much more so than for an industry that does not value marketing very highly.
The number one general category of products with an over-reliance on marketing is in the fashion industry. From clothing to cosmetics the thing that makes the products in the fashion industry desirable (and therefor commercially viable) is high-end mass marketing. This means that an extraordinary proportion of profits made by the industry have to be reinvested in advertising campaigns or their products lose market-share precipitously (and even with extraordinary efforts the whims of public fashion consciousness are still terribly fickle.)
Direct sellers, through network marketing, are capable of achieving the same level of success as any high-end marketing firm at a fraction of the cost. This means that any company in the fashion industry could largely eliminate their marketing overhead by employing independent contractors to pound the pavement for them selling their products neighbor to neighbor, friend to friend, and the volume would remain the same (or increase.) What would also be achieved is greater stability within the industry: People have more allegiance to Aunt Betty than they do to a billboard or a TV ad.
My point here (without mentioning a specific Direct Selling Industry) is that if you're considering a home-based business and you intend to demand high profitability for yourself -even if its just in the form of perks, freebies and discounts- you'll have better luck marketing high fashion sunglasses than you would selling multi-grain oatmeal. They could both be high quality products but only one would (and should) pay out large in the marketing sector.
Love, Tony
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