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MLM (Multi-Level marketing also known as network marketing) type companies (think Amway, Tupperware, Avon, Shaklee, etc.) often do not work for barter members as a sole source of trade because of their high cash cost. A question that often comes up is: Is bartering worth my while when I have to make a cash outlay and then only receive 35% income on the products that I resell? Is bartering worth it on such a small profit margin?
While we can tell you that barter is a good way to move excess inventory, samples and end of season items, the answer may very well depend on what you plan to do with the income that you're making on trade and introduces a concept called "Reverse Trading." What is Reverse Trading? Let's illustrate... Mary, who is an independent distributor for a cosmetics company needs to get some dental work done. She knows that the dental work will cost her $1,000. She's strapped for cash, so would prefer not to pay $1,000 out of pocket.Here's what Mary does. She orders $650 worth of wholesale cosmetics from her company and sells it retail for $1,000 on trade. SBC then charges her 6% when she sells the cosmetics to the trade member ($60). She'll then go to an in-barter-network dentist and will get the $1,000 worth of dental work done (with the barter dollars she earned from the sale of her cosmetics). SBC will charge her 6% ($60) for the transaction. So, out of pocket, she spent $650+$60+$60=$770 in cash for what otherwise would have cost her $1000. That represents a savings of 23%! That's certainly something to think about, especially in our economy.
If you have big ticket items that you'd like to purchase or have recurring expenses such as chiropractor work, cleaning services, landscaping, etc., utilizing your MLM business may be your ticket to getting what you need for less. If you need help figuring out how you can make your MLM business work for you, we're here to help, so let us know!
