Amazon and your Network Marketing Business

“Why should I buy it from you when I can get it from Amazon?”

You may have noticed that your network marketing company is now competing with you on Amazon.  That may be true, but a better word to describe it is that they are collaborating with you. 

Here is some history. When Amazon evolved as a reselling platform, some astute network marketers figured out they could sell their products along with perhaps other products and earn some decent “retail” profit. If your company has 100,000 distributors and only 1% of them decide to sell on Amazon, that is 1000 Amazon buying options for your product.

Of course, the only way to differentiate yourself on Amazon if you are selling the same product, is to win the Buy Box by undercutting their price, which results in a race to the pricing bottom.

Resellers on Amazon were in for a rough education. In order to stay on page one you have to advertise, which is its own game. According to Jungle Scout, the cost per click for ads can be as high as $10 per click, depending on the competitiveness of the keyword and how many people are bidding against you. Add in Amazon’s fees, which range from 40%-50% … all your retail profits are gone. If you are discounting and advertising to stay on page one you are broke. Amazon resellers come and go faster than network marketers. It is actually a much tougher business. Approximately 90% of new sellers do not achieve long-term success according to Seller Sessions. But what this leaves is a moonscape of old, abandoned, and dead listings. It can end up looking like a landfill of your products. 

Policies and procedures may prohibit selling on Amazon but that conflicts with free commerce laws.  Once you own something like the inventory you purchase, you can pretty much do whatever you want with it. MLM Amazon sellers became very adept at hiding their true identity making it hard to terminate them. 

All and all Amazon creates a real mess for network marketing. And then the solution.

Since we cannot stop them, join them. What? Sure. Since your company owns their trade name they can actually become the exclusive Amazon seller of the products. And since they don’t have to pay commissions on those sales they have the profit margins to make it work, to actually become a very prolific Amazon brand. And by applying to be the brand owner, Amazon will actually go to work, kicking out every “unauthorized” seller.

Now the landscape looks different. Instead of a flea market on steroids, you have one Amazon seller that controls the price, controls which products it offers, controls the branding etc. This is a far, far better solution for network marketers than the flea market.

But still, isn’t my company competing with me?  My customers don’t know or care about all this history.

You are correct.  Your customers do not care about that. What do they care about? That is for you to find out. You may think it is the price or speed of the transaction.  Perhaps it depends on what you are selling. If it is helmets to protect your brain or nutraceuticals on which you rely on for “life”, perhaps value, trust, reliability, relationship, and integrity are more important. 

Here is where the collaboration comes in. Between you and your company, you can win the Amazon game.

First, your company’s role. They control the price at which they list products on Amazon. They have to be higher than a customer can purchase them for on your website. And they control which products are listed. They do not have to list every product. They do not have to list the most popular products. All of this is under their control. 

Second is your role. Relationships matter. Amazon is a pure transactional experience. It is not a bad one but it is not a spiritual one either. Notice for yourself what it is like walking into a big box store like Lowes or Costco and needinghelp understanding a product. Might as well phone a friend. Network Marketing offers a person to call, someone who cares, someone who if they do not know the answer will find it. Think of us as your local Ace Hardware or owner-operated pharmacy. You may be able to buy the same product at Lowes or Costco but what does it feel like? Relationships, trust, gratitude, listening, empathy, and education are where we win.

And here is an area where together you and the company can collaborate to make Amazon mute. Auto Ship or Loyalty Orders ….whatever you call it. In most network marketing companies 90% of the sales come from a subscription program. Why? Because the company is smart enough to incentivize subscriptions far beyond a small discount or freight-free. And they do this often with free products. This is where Amazon cannot compete. A bottle of free product costs the company maybe $10 but it is worth $50 to the consumer. You will see going forward all network marketing companies move the cheese…even portions of the commission budget to subscription loyalty. Why? Because customer retention is the holy grail of exponential growth and legacy income in network marketing. Most network marketing companies only keep 5-10% of their customers ordering every month long term. If you can move that to 20-30% you can grow 10X…..ten times faster and ten times bigger. How would you rather get paid, 50% of a 10% retention or 30% of a 30% retention? If you are not sure you do not get the math of exponential growth. Check out this retention calculator. It will blow your mind. For example, a team that retains 40% of its customers long-term vs one that retains 10% will grow 17 times larger over a 7-year time span. 17 times. You want your company to move the cheese. Pay less in commissions and more to retain customers. 

Let Amazon have its one-off orders every once in a while. You want the subscriptions. You want the customers who are open to considering getting their product for free. You want customers who are ambitious and courageous enough to build their own legacy income. 

Amazon is like death and taxes. It is not going anywhere. You can use it as an excuse to quit or just throw a fit. Or you can go all Seal Team 6 on it.  Improvise, Adapt, and Overcome.  

“It is not whether or not you will get harangued by flying monkeys on your way to Oz. You will. It is whether or not you figure out how to pick yourself up, dust yourself (mindset) off, and get on with it.  Any idiot can figure out how it won’t work. Figure out how it will”. RB 

P.S. My blogs are, for me, a conversation. I rant for a bit and then … if so inspired, you respond. Your comments close the loop of conversation. They let me know I was heard. They let me know I contributed something … or not. I encourage you to close the loop … or open a new one and say something.🙂