To generate dealers’ sales, you need a network. It doesn’t matter if your product is market ready or a great bargain. It’ll have no value for you if you don’t know who will buy it or how you will tell the world about it. The only way to sell your product is to develop a strong dealer sales network.
As an illustration of how to set up a dealer sales network, consider the case of a man named Rory. Rory invented a gadget that no homeowner could live without. He knew the gadget had enormous sales potential. He calculated the production cost of the gadget to be $0.50 per unit. He believed he could sell the item for $10. Advertising would cost $2 per gadget. That meant Rory could earn $7.50 on each gadget sold. Rory’s only problem was how to call attention to the item.
The solution to Rory’s problem was a dealer sales network. He decided to recruit as many people as he could to help do the selling. This in turn meant giving people a reason to join his sales network. Rory offered new recruits to his sales network a cut of the profits. Each of them would earn $2.50 for each gadget sold. Their sales would also mean profits for Rory.
Rory still needed a way to reach out to prospective sales reps. In order to draw sales reps to his dealer network, Rory placed ads on the Internet and in magazines. He also obtained a list of email addresses of people who worked freelance and sent out a mass emailing in the form of a dynamic sales letter. The cost came out of Rory’s ad budget.
Rory’s next step in building a dealer network was to develop a “sales kit.” Included was not just information about the gadget. There were also instructions on how sales reps could win recruits to their own downline.
A friend of Rory’s who was in business advised Rory to charge a dealer registration fee. “That way,” the friend said, “you build a dealer sales network and pocket more of a profit.”
Rory thanked his friend. Then he rejected the idea. Rory believed that asking recruits to pay for the privilege of joining his sales network would have the reverse effect. He was convinced it would drive people away from the network.
In fact, Rory took an approach that was precisely the opposite of a registration fee. He offered a cash bonus for each dealer who brought new dealers to the sales network. Dealers would receive a percentage of the sales of any new dealers they persuaded to join.
Rory’s sales network grew by leaps and bounds. In just a year’s time, it had about 1,000 dealers. By the end of the second year, it had grown to 4,000 members. Profits from network sales enabled Rory to buy television advertising time. These ads boasted sales of the gadget to new, unheard-of levels. The ads also drew new dealers to his network.
Rory’s example teaches a number of lessons about multi-level sales networks. One is that sales reps in a network are not just selling product. They are also selling new recruits the opportunity to join the network. Another lesson is that incentives are the best way to grow a dealer network. Rory’s solution was to offer a percentage of new dealers’ sales to his sales force. This led to more recruits to the company and ultimately more money for Rory.