MLM Product Packaging vs. Retail Packaging
Shouldn’t MLM companies develop more glamorous packaging for their products?

Entrepreneur Magazine Online — Ask the MLM Expert

by Michael L. Sheffield
CEO The Sheffield Group


Question: My business career has been spent mostly in retail store sales. While I have recently done well in direct selling and MLM, it seems odd that these type of companies don’t give the attention to their product packaging that we did in the traditional retail world. Wouldn’t these companies have better success if they developed great packaging for the products?

Answer: Preparing and promoting a product via packaging is critical to retail competition. While important, packaging isn’t quite as critical in Multi Level Marketing.
Why? Most sales are created by word of mouth promotion.

The passionate testimonials of independent representatives create enthusiasm, and their personal passion is contagious. This enthusiasm causes otherwise skeptical people who probably wouldn’t buy no matter how appealing the package may be, to make an emotional buy-in to the product. If the product performs as promised, the company and the independent distributor can count on re-orders from yet another satisfied customer.

You see, in the retail market, a great label, a unique bottle design or dynamic box may well prompt the first purchase of the product. But if that product fails to satisfy the customer’s need, there won’t be a reorder. Enough unhappy customers and the product dies. The same goes for MLM.

In the past, most MLM packaging was average to poor. But loyal distributors and their personal customers drove sales home. Their efforts created some of today’s largest Multi Level Marketing Companies.

Today, more and more MLM companies are paying closer attention to product image/packaging. One reason for this change is the significant number of entrepreneurs entering the MLM corporate management world from the traditional business world. Trained in conventional corporate marketing concepts, they can easily fall short if they focus more on perception than they do on quality and performance. It is always important to consider how attractive, fancy packaging can drive up costs which, of course, are passed on to the customer.

One of the many great things about marketing products using MLM distribution is the elimination of competition with the myriad of similar products on the store shelf. In fact, you’re not even competing with other MLM companies! When a prospective customer checks out your product, that’s all they’re checking out.

Because the customer isn’t comparing product brands, but is motivated by the product story, its benefits and the enthusiasm of the independent distributor, the MLM company isn’t under pressure to invest in elaborate and expensive packaging. They can invest more on the quality of the contents and make sure the product delivers its promise while keeping the product cost effective. At least that’s what they ought to do.
Quality is critical. A company endeavoring to build a legitimate long-term business must have products that perform — products that people want to buy again and again.
For all their similarities, MLM and retail marketing are different on this point. Retail marketing relies heavily on traditional advertising to build brand awareness or on unique packaging to stimulate impulse buying.

Example: Because of shelf space competition, a retail product may need a full color label or a decorative outer box to stand out from the pack. Because an MLM product is presented by the enthusiastic distributor, it already stands out. Hence, you may get away with a two-color label.

In multi level marketing, buying decisions are usually based on the customer’s response to a live demonstration or verbal explanation of the product. It’s a one-on-one presentation, the individual attention of a friend selling to a friend. Consequently, that customer makes a more informed buying decision. And while still important, the actual package of an MLM product isn’t as critical as its retail store counterpart. It’s just a different issue.

Again, I’m not suggesting that multi level product packaging doesn’t matter. It does. The product needs to have a professional image. Distributors deserve a sense of pride in their product. Their customers need to feel confidence in the product. The package says a lot about the competence of your company. All I’m saying is that in most cases, the package just doesn’t have to be inordinately fancy to get the job done.

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About the Author:

Michael L. Sheffield is the CEO of The Sheffield Group, a full-service direct sales and multi level marketing (MLM) consulting firm. He is a Co-Founder and Chairman Emeritus of the Multi Level Marketing International Association and in 2001 he was inducted into the MLMIA Hall of Fame. He and the Sheffield team have assisted in hundreds of national and international MLM corporate start-ups as well as offered a full line of services for established direct sales companies including consultation on MLM Website development. As the most noted expert on compensation plans, he has been a guest lecturer on the subject for the DSA, University of Illinois, University of Texas, Berkeley and Harvard Alumni Association. He has helped launch over 200 new products marketed by direct selling companies around the globe. He can be contacted at 480-968-6199, The Sheffield Group, 2239 N. Hayden Road, Suite 103, Scottsdale, AZ. 85257, website address: www.sheffieldnet.com.

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