Your MLM Company Shortcut to Success
Direct Sales Journal
by Michael L. Sheffield
CEO The Sheffield Group
They say imitation is the highest form of flattery. Well, that may be true but it can get you into a heap of legal trouble if it is plagiarism. And it is downright dishonest. However, when it comes to product development, marketing ideas and compensation plan strategy, being a creative copycat could be a legal and ethical shortcut to achieving your business goals for your new MLM, party plan or direct selling company.
The key word here is Creativity. The best definition I ever heard of creativity is “ The making of the new or the rearranging of the old in a new way.” Isn’t it interesting that there seem to be very few new ideas when it comes to MLM? Look at the latest compensation plan thinking and you will find that the components are just repackaged, repositioned and renamed ideas from the past. The same goes for new product development. Enhance an already successful product concept and you can capitalize on proven customer acceptance. In fact, many times being first to market doesn’t mean you will capture primary market share. You might just plow the ground for others who will learn from your mistakes. Many smart entrepreneurs with limited capital have watched market trends for successful product launches early in their life cycle and creatively redesigned or repackaged the concept. There's nothing wrong with this as long as you don’t cross certain legal lines.
So like Johnny Cash says, “You need to learn how to walk the line.”
It’s been said that there is nothing new under the sun. Not necessarily a truism but new-to-the-world ideas are definitely hard to come by. These new product concepts are usually developed to serve a recently defined need in the marketplace. Many of the new product concepts today are a result of the worlds increasing technological advancements. Still, most new products are merely enhancements of previous products that have already found a profitable market.
Why reinvent the wheel if you can carve out a piece of an already proven market with a product that can compete as better than, cheaper than, or more convenient than the original. Keep in mind that from the legal standpoint; you can’t copyright an idea, only the way it is presented. So in launching a new product, your choice is to try to be a market maker for a totally new concept or to take advantage of some of the great marketing ideas of our day. Making the market for a new product can be very expensive, especially if you must first establish that there is actually a need for your item. Or, as many have done before you, use a little imagination and creativity and your unique twist on an idea may be your shortcut to success.
Taking a look at recent business history, it is evident that it is not necessarily the first promoter to launch a new idea that generates the most profit. One of the great economic powerhouses and driving forces of our time is Microsoft. Yet annalists agree that Microsoft is not necessary an innovator but a great implimenter. In fact other people thought of many of Microsoft’s great successes first. Who would have thought that the entire empire on which Microsoft is built, the Windows operating system with current annual revenues of about 7 billion dollars, was not the brainchild of Harvard drop out, Bill Gates, or his high school buddy Paul Allen.“ By the way, those are the guys who today who have amassed a net worth which is the size of the gross national product of many small countries.”
And yet neither Gates nor Allen invented the now famous DOS Operating System. When Gates and Allen were presented with the opportunity by IBM to create an operating system for its soon to be unveiled PC "personal computer” Gates and Allen quickly scrambled to purchase the rights from a local software developer in the Seattle area for a very modest sum. It was the lucky break with IBM and the ability to innovate and implement another’s invention and idea that proved to be the platform for the windows operating system that drives more than ninety five percent of the world’s computers. It was the force behind the creation of the most valued company on the planet, much to the surprise of old stalwarts like General Electric, General Motors and even their first patron, IBM.
If you think that being a creative copycat just works in the traditional business world and has no real application in the direct selling and MLM world, then you have been asleep for the past 60 years. Let’s talk a little shop here.
Everyone calls Amway the grand daddy of MLM. In fact, in the minds of many in the general public, Amway is MLM.
Why? Because everyone knows that Rich DeVoss and Jay Van Andle invented the MLM compensation system. As Wayne and Garth would say, “ Not! Rich and Jay would be the first to tell you that they proudly borrowed the concept from their first network marketing experience as distributors for Nutrilite, the California Vitamin Company that originated the MLM compensation plan concept. Or did they? Some think the MLM compensation concept was invented by another MLM company launched before Nutrilite called Wachters. Whatever our roots, our industry has continued to creatively reinvent itself and enhance the proven concepts of the past adjusting them to present day needs.
After serving for several years as top distributors for Nutrilite, Van Andle and DeVoss decided to embark on their own adventure. Named after their idea of “the American Way” they called their company Amway. Selling soap and later vitamins put them on the road to becoming the worlds largest MLM Company. They didn’t invent soap. But they enhanced it and made a market for concentration and biodegradability long before our country’s environmental movement. So fond of Nutrilite, its marketing plan and products, they not only emulated the MLM concept, but they returned to buy the entire company that was to become the dietary supplement division of the several billion-dollar giant.
Clients regularly tell me “ I want my company to be just like XYZ Company only better. I like what they are doing but I don’t want to be considered a copycat. I’m concerned about not having my own identity.” There is nothing wrong with this if you do it right. It is certainly better to model your company or product after a successful concept you are in tune with and embrace it with your own personality, philosophy, and dreams than to copy a company or product concept just to make money.
Obviously, people with conscience and integrity always are bothered with copying someone else’s idea. Don’t let this worry you because the reality is in the natural character of entrepreneurs to believe that they can improve on the other man’s idea. MLM Company marketing strategies and even their product ideas are communal. It would be very arrogant of us to think that we have envisioned and brought to market a totally new to the world idea. Just like that out of fashion tie, wait long enough and every idea comes full circle. In starting your MLM Company, you will be well served to study the materials, audio and video tapes, compensation plans, product lines, business philosophies, marketing strategies, of the most successful companies of the past and the hot new companies of the present. The secret is gaining the ability to discern the things that create success.
Our firm studies old trade journals, patents, and even product offerings of companies out of business for years to glean an idea or two that can be reincarnated. In my soon to be released book called “What Elvis Taught Me About Multi-Level Marketing” I focus on products as they relate to Purpose, Public Perception, Preparation, Procurement, Potential, Positioning, Pricing, Packaging, Possession, Protection and Passion to build your company. One chapter deals with treasure hunting for products and how to find a long lost diamond that you can polish and give a modern face-lift or even that diamond-in-the-rough that just needs your magic touch. The key is to recognize a winning idea when you see it and creatively massage it to make it your own.
In designing and launching a new MLM Company, don’t criticize your competitors just because you think you could do it better, and certainly don’t be jealous of someone else’s success. When another company has attained good fortune in the market that you are entering, it can become a formula for your own success if you analyze the factors that have made their product of business model work and determine how to improve it. Remember, historically, we build on the ideas that came before us. Immerse yourself in every facet of MLM possible. Become a student of MLM history and of current events will be your best assurance for making right decisions for your own company. And remember. Learn from the successes and the mistakes of others. You can’t live long enough to make them all yourself.
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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