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February 1999

 

Technology

The E-Commerce Era - Luke Melia

What the coming age of Internet commerce means to Network Marketing

Luke Melia E-COMMERCE. It has already been nominated Buzzword of the Year by some-- and it's only February. The world is excited about e-commerce because it means that the Internet is pumping real consumer dollars through the economy in a brand new way. Let's dig through the hype and take a look at what this evolution of the buying game will mean to Network Marketing.

E-commerce is short for electronic commerce: the buying and selling of goods or services using the Internet. Understanding the impact of e-commerce can be confusing. Do these recent explanations of e-commerce's advantages ring a bell?

 

  • "...cuts out the middle man, allowing for better prices and increased profits."
  • "...allows for a more personalized, one-to-one shopping experience."
  • "...reaches out to the customer in the home, overcoming increasing tendency of Americans to spend more time in the home cocoon and less time in retail stores."

Yes, both e-commerce and Network Marketing bring the manufacturer closer to the customer. But it's a case of "same words, different song." E-commerce is the how, Network Marketing is the why.

Richard Poe took an insightful look at the way new technologies were affecting our industry a few years back in Wave 3. (If you haven't read this book, move it to the top of your list!) One characteristic of a so-called "Wave 3" company was that it offered customers direct ordering via an 800 number or catalog order form. The company handles the order and you get the commission. Contrast this to the days when Networkers had to inventory product and make deliveries.

E-commerce makes things even easier. The customer can now order online 24 hours a day, seven days a week, with all the information they could possibly want about the product a few clicks away. So what does it mean to your commission checks?

The question mark here is whether your Network Marketing company still needs Network Marketing. Amazon.com, CD Now! and dozens of others have launched "affiliate programs" which offer commissions for referring book- and CD-
buying consumers to their web sites but have no incentive to offer multi-level compensation structure. If your company could easily operate like this, watch out!

The MLM companies that will be safe from a negative e-commerce impact fall into two categories. The first are those which focus the vast majority of their energy on selling the business opportunity. The customer, who is almost always also a distributor, is buying in order to succeed at his or her business goals. Whether it's by phone, fax or the Internet is irrelevant.

The second type of company is that which markets a made-for-MLM product; the kind of product or service which requires the customer touch, taste, feel, try or personally experience the benefits before he or she will buy. This type of sale often requires that the salespeople educate the prospective customer and share their own belief with the prospect. Once that educational/experiential cycle is completed, they can log on to the Internet to place the customer's first order. Leave them with a sample to get them going and let the company do the rest of the work. Everybody wins!

E-commerce will make business, including ours, more efficient. If that highlights an unacceptable level of inefficiency in your company's Network Marketing sales method, watch out. More than likely, however, e-commerce will mean fewer mistakes in the corporate office, faster processing and turn-around times, and more convenience for our customers. All that from a little "e" in front of our everyday commerce!

 

Luke Melia can frequently be found buying books, CDs, software, or airline tickets at two o'clock in the morning on the web. Luke is Upline's Technology Editor and welcomes comments and ideas about this or other columns. You can e-mail him at luke@upline.com.

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Reprinted with permission from Upline, Upline Technology - February 1999, 888-UPLINE-1, http://www.upline.com

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