What is an MLM?
Multi-level marketing, or MLM, is a distribution model in which non-employee representatives are compensated to market and sell a company’s products and services. Representatives are considered independent contractors and the “owners” of their business. This business model allows individuals to become a “low risk” or “micro-entrepreneur” with a relatively small initial investment. In an MLM model, there are two ways that representatives generate income. First, they earn a bonus based on their retail sales; and, second, they earn an override commission on the retail purchases generated by the individuals they have recruited.
MLM software is critical to running a company as it automates many of the business processes required in direct sales. Many iconic companies utilize this business model, including KYANI, Paparazzi Accessories, and J. Hilburn.
An Overview of MLM Software
Multi-level-marketing or MLM Software is used by Direct Selling companies to run their business. MLM Software is the backbone of a company’s technology platform. The best MLM software includes features and functionality that are unique to the MLM business model. A complete solution should contain a commissions engine, genealogy, corporate back office, e-commerce shopping, representative portal, reporting, replicated websites, and a branded mobile app.
Preparing to launch MLM software begins with your company’s corporate marketing website. The colors, fonts, and images that are used to create your branding have a significant impact on the way your company is perceived. Colors have powerful associations, and each color can conjure powerful emotional reactions. The colors in your logo should reflect the values of your business. It is important that the colors in your brand pallet mesh well together and create balance.
If you don’t currently have the ideal corporate website, our expert design team is available to work with you to create your dream website.
Once your corporate website is complete, the next step is for the MLM software to enable the corporate website to be “replicated” into an unlimited number of representative sites. Each site will have a unique URL, that is linked to a representatives identification number.
Each replicated website is set up to include e-commerce shopping as well as enrollment or “Join Now” functionality. Representatives can send their customers product “links” that are tied back to the shopping cart on their personal replicated website. This ensures that commissions from retail product sales are always applied to the correct person.
When a representative joins an MLM or direct selling company, they are given access to a representative portal or back office. This portal is part of the MLM Software and contains the data related to an individual’s business, such as orders, rank, bonus payments, auto-ship, customer details, qualification status, training, events and more. As representatives mature in their business and rise in rank, they have additional needs as an organizational leader. The best MLM software anticipates these needs and includes options for displaying more detailed reporting based on rank as well as communication tools and automated training.
Your MLM software also provides the home office team with their Corporate Back Office. This should include a Consultant & Customer CRM, Genealogy Management, Commissions Engine, Support Tickets, and API Access. Additional features that you may not need immediately, but should be available from your software include things like a client configurable Promotions Engine, International Countries and Currencies, and a branded Mobile App.
What is the Best MLM Software?
The MLM software you select is one of the most important decisions you will make in your direct selling business. You want to be sure the company is profitable so they will be around for a long time. You also want to be sure they are investing in their technology with ongoing upgrades (ideally free ones), new features and enhancements.
When looking for software companies to consider, it’s a good idea to check third party objective review sites such as Capterra for the Most Reviewed MLM Software companies. This will help you focus on the top-performing companies. Be careful not to be fooled by “highest ranked” which may be based on just one review.
Reviewing the company’s website will also provide a lot of useful information.
- Do they have testimonials or case studies that you can review?
- How long have they been in business?
- Has their executive team worked on the corporate side of direct sales?
If you are new to direct sales and want to determine which MLM Software is right for your company, you will want to do an assessment of your current technology, compared to where you need to be. If you currently have MLM software, you will want to review the features to see how your technology stacks up in the marketplace.
What does MLM Software cost?
When it comes to MLM Software, there are some “cheap” options. Here you will want to be very discerning. A low price can be very costly for direct selling companies. Remember, no legitimate business can afford to work for free. If a software company is offering you “no money down” — how are they paying for the costs they will incur to get your system live? Perhaps they are cutting corners in ways that won’t initially be apparent such as minimizing new releases, not having live support reps you can easily reach, or reducing the speed of your service by overloading their servers. Any company that tells you they are willing to take a loss up-front so they can “share the risk,” “partner with you,” or so they have “skin in the game,” should raise a huge red flag.
Conversely, some companies are extremely expensive — so much so that companies wind up spending the majority of their budget on software and they literally have no money left for marketing, and ultimately fail. Don’t let this happen to your company.
In the middle of these two extremes, you can find high-quality software at a price that still allows for plenty of marketing and will keep your business running smoothly. It’s essential for you to budget money for your software — good software will run you in the range of $20-$35k to get started and a monthly hosting fee of about $3-4k. Look for flat rate hosting with no additional hosting fee per order or rep. You need to be able to plan for all your business expenses, and the only way to do that is with a fixed monthly hosting fee with no surprises.