Distribution Systems

Traditional/Conventional Distribution

One might be confused between Traditional, Intellectual and Technology based distribution. 

Well Technology based distribution is a conventional distribution system with the combination of technology to it, i.e. doing a conventional distribution with the aid of internet, e-commerce etc. While intellectual distribution is educating a consumer about a product or service of which the consumer has never felt any need in his/her life and servicing that consumer on a one to one basis using technology. 

One fine analogy (of intellectual distribution) is the use/popularity of mobile phones, which has become a basic item in a man’s day today life.

Intellectual distribution is the latest trend in distribution system, and is closely related to direct selling. In the future most of the money will be related to this. The advantages of this system are as follows.

•         Directly from the Manufacturer

•         Using Technology: e-Commerce

•         Consumer gets a Chance to own the Business

•         No Intermediates; hence benefits go to Consumer turned Business Owner

•         Anyone can start the Business at a negligible investment

•         Warehouses, show rooms, offices all operated by the Company; hence no overheads

•         Quality guaranteed- 100% Product Refund Policy

•         No Risk – 100% Investment Refund Policy

•         Unlimited Income – Proportionate to the Efforts.

•         Creating a legitimate safe and secure income.

Traditional Marketing and Distribution

To understand more about direct selling and how it works, one should firstly know how a conventional distribution works.

In a conventional distribution system there will be minimum of 3 levels between the manufacturer and consumer. No consumer can buy a product from a manufacturer. So it’s mandatory for some middle men to fill the gap between a consumer and a manufacturer.

The usual levels in a conventional distribution system are as given below:

1.     Manufacturer
2.     C&F Agents (Carrying and Forwarding)
3.     Wholesaler
4.     Retailer
5.    Customer

In some cases there maybe more than 3 levels (such as advertisers, stockiest etc) between Manufacturer and Customer. Most of the money for the product paid by the customer is gone to these levels before reaching the manufacturer (and vice-versa). Around 60% of the price of the product is gone to the C&F, Wholesaler and Retailer. (A product costing 40 Rupees to manufacture will be sold at the retail shops for 100+ rupees)

Additional to increase in price of the product, there is another risk of getting the customer cheated if the retailer is selling a duplicate product (substandard or old product) knowingly or unknowingly, because usually a common customer cannot recognize quickly whether the product is original or duplicate. The blame for the duplicate products cannot be given only to the retailer, since he is getting the product from the wholesaler and so on.

So the culprit for the duplication/adultery obviously should be C&F, wholesaler, retailer or even a combination. The manufacturers name can also get defamed because of the duplicate products. So there is always a little risk to the customer, manufacturer and others when they follow the same old distribution.

Though most of the people doesn’t know about this, and even if they know it (nobody cares), and they know that nothing can be done, because that is how the system works in a conventional distribution.

Smarter Distribution

Though traditional distribution cannot be removed totally, in some businesses the rules and system of the traditional system is necessary. But in many areas we can introduce and some companies have already introduced a smarter distribution system, named as direct selling system.

In this type of distribution and there are no middlemen between the customer and the manufacturer. The customer can buy the product directly from the manufacturer. Obviously in such a type of distribution the money that is given usually to the middlemen are saved which results in  the reduction in the  cost of the product, an opportunity for the customer to distribute/promote/advertise the product and generate money from it etc.

Suppose a person buys toothpaste from a retailer, he uses the product. He gets no benefits or recognition from the manufacturer of the product because he bought that particular brand of toothpaste (unless he is lucky enough to win a scratch and win).

This example will definitely seem to be ridiculous, absurd and funny for the people who don’t know about any other type of distribution other than the traditional distribution.

Also it is a matter of fact that one buys a product only to consume the value of that product, no consumer expects the manufacturer to help the customer or say a “Thank You” to the customer, and it’s ridiculous even if such a thing happens.

But in the current era, it is time to change the type of thinking of the customers mainly because of the advent of direct selling in much type of products. To know more about direct selling, its markets etc click here.

Direct-to-consumer Distribution

Unlike the traditional distribution, in direct-to-consumer distribution, there are only two levels.

1. Manufacturer 
2. Customer

Since there are no middle men in this type of distribution, the consumer can take advantage of this in many ways, such as, the:

•   Customer gets the opportunity to promote the product and earn extra income.
•   Customer can get a Retail Margin upto  20%
•   Customer can get incentives upto 21%
•   Customer can get Bonuses and other benefits.

Every customer has an equal opportunity to earn an extra income (which is usually gone to the middle men, advertising, brand endorsement fee etc in traditional distribution). That is a normal consumer gets an opportunity to become both the company business owner and a consumer gaining upto 60% benefits at the same time. It is infact a great opportunity.

Revolutions

There has been a number of revolutions before,and there will many more to come in the future,but the contemporaries just don't notice such revolutions happening around them.


Some of the Financial Revolutions which occurred  (as told by Paul Zan Pilzer in his book Wellness Revolution) are given below:






 1960s to 1980s – Automobile Revolution.
People who were part of Automobile Revolution mad a lot of fortune and this was the period when a lot of Millionaires were created.

1980s to 2010s – Computers & Internet Revolution.
People who were part of Computer and Internet Revolution (Information Technology) mad a lot of fortune and this was/is the period when a lot Billionaires were/will be created.

2010s and beyond – Wellness Revolution.
This is the current era and a lot of people are making fortunes from this industry, though the fact is that only a few people knows about such a revolution. The wellness revolution is only at its beginning stage. This will be the era when "Trillionaires" will be created.

Till 2000s the world was in the Industrial Age and the Manufacturers made the Money by traditional Distribution. And this was the period when the maximum amount of employees was made.

In the current era, we are now in the Technology Age /Information Age (e-commerce, internet etc) and it’s the distributors who are making and will be making the money in this age. The traditional distribution system will eventually expire and the new type of distribution called as Technology based Distribution will replace it.Technology based Distribution is followed by most of the big companies nowadays and is spreading rapidly.

Paul Zan Pilzer on Information Technology Age
“In this Information age, where Technology has made everything easy, it is not the one who finds better ways to manufacture the products, but it is the one who finds out better ways to distribute them that makes money”
Though Technology based Distribution is just not enough to market the products in the current competition,people are searching for new ways to distribute their products and now companies have come out with a new type of distribution known as Intellectual distribution.

Paul Zan Pilzer defined Intellectual Distribution as ““Educating a consumer about a product or service of which the consumer has never felt any need in his/her life and servicing that consumer on a one to one basis using technology”

Other Significant Trends

• •e- Commerce
• •Employment to Entrepreneurship (Employment was the product of Industrial age and Entrepreneurship is the product of Information Age)
• •Indian economy is one of the fastest growing economies in the world
• •Indians have a high level of disposable income

Principle of Leveraging

Archimedes once said, “Give me a lever long enough and I could move the world.”

The concept of Leverage is important when it comes to money, business and wealth. The principle of leverage is a powerful tool we can use to get ahead financially in life.

In technical view or in primary school science,leverage is to do with seesaws, fulcrums and pivots.A lever allows you to use less force to lift or move objects and this concept is applied in a lot of the everyday products we use such as scissors,doors etc

With respect to money, we can likewise use the principle of leverage to accelerate our financial ambitions. When studied properly and intelligently applied, leveraging will allow us to earn more with less work comparatively.

We should learn to invest in ourselves. Read books, attend seminars, join communities and expand knowledg in whatever way possiblee. The more we practice or read etc,the more we get skilled and talented

When it comes to financial leverage.it means using other people’s money (and work) and making it work for us. The value, utility and purpose of this type of leverage is probably the fountainhead of wealth.

When we simply rely on our own capability to save money alone, then it will take some time before we can invest and accumulate wealth. But by utilizing our resources and assets to acquire good debt (an investment debt that creates value), then we can expect exponential growth on our money.

Resource leveraging,it refer to it as the power of collaboration. In businesses,especially for beginner entrepreneurs,there is a huge possibility that they fall into the trap of self-employment. It’s common to see intelligent, eager and optimistic persons who started a business which eventually closed after less than a year just because the person got tired of running it on his own.

Place controls in your business and learn to employ other people to work for you. Investigate partnerships for your business and always consider using the aid of other individuals and experts to help you plan your actions and accomplish your tasks.

The best part is that applying the concept of leverage is very simple in Amway business compared with other businesses,mainly due to the reason that in other businesses one need to find persons who are trustworthy to be made as a partner since financial risks are involved,while in Amway,the opportunities are equal and all the ABOs have the same responsibilities.

Entrepreneurship

Entrepreneurship has become an obsession throughout the World nowadays.More & more people want to be in control of their own financial destiny.

There are only two Achievement Factors for MOST of the businesses: TIME and MONEY
Ways of Generating Income depends upon Ways of Thinking.





Robert Toru Kiyosaki,an American investor, businessman, self-help author and motivational speaker described a quadrant known as the cashflow quadrant.
To which quadrant do you belong to ?

1.Employees
Advantages:
•No tension regarding profit or loss etc of the company.
•Gets payment/income in time.
•Safe job if employed in a MNC. Provided there is no target or competition.
Disadvantages:
Always exists a minor tension whether the job will be available always.
Lacks leadership qualities.
Have to show up at a particular time every day to make money.
Starts over every day at Rs 0.00.
Trade hours for his income and someone else own the business.

2.Self-Employed
Advantages:
•Time is flexible but exists a tension
•Always a fluctuation, income depends upon the market of the products sold or reputation of the person.
Disadvantages:
Have to show up at a particular time (though flexible) to make money.
Start over every day at Rs.0.00.
You own the job & trade more hours for Rs.

3.Entrepreneurs(or Business Owners)
Advantages:
•Flexible timings
•A Entrepreneur is a leader
•Your money works for you, rather than you working for your money.
Disadvantages:
No disadvantage. (Any challenge is converted into an opportunity.)

4.Investors
Advantages
•Out of the above 3, the best quadrant.
Disadvantage:
An investor is usually a big entrepreneur, so No disadvantages. (Any challenge is converted into an opportunity.)
Need up-front capital.(a lot of money to invest)


So the Left Quadrant (Employees and the Self-Employed) are always having disadvantages more than their advantages compared with the Right Quadrant (Entrepreneurs and Investors)

The Bad news for the Left Quadrant people is that they are the 99% of the world population but they only get 1% of the income, while the right quadrant people are only 1% of the world population and they get the remaining 99% of the income. So this is the reason that the entrepreneurs are always wealthy and having a great lifestyle while the employees are never satisfied with what they get. This is one of the sad secrets.

The Good news for the Left Quadrant people is that they can get into the right quadrant by just applying a secret, a secret that is applied by the right quadrant people, which is called as “the principle of leveraging”.If you could participate in a similar business model using the principle of leveraging, then you can get into the right quadrant. All one has to do is “To-do the work to build a business system (today), in order to reap the benefits (tomorrow)!

Indian Direct Selling Association (IDSA)

There is no minimum age, qualification or any other bar to start this business. The only pre-requisite is to have passion to sell.
People who want to take up an alternative to traditional employment or to earn extra flexible income, based on their work performance, join DS.
People whose circumstances do not allow for regular employment can take up direct selling, in many cases DS opportunities develop into a fulfilling Career.

IDSA is a self-regulatory and promising body for the DS industry in India. It is the Indian counterpart of a world body, World Federation of Direct Selling Associations (WFDSA), based in the USA, WFDSA regulates and strengthens DS in over 58 countries.IDSA scrutinizes direct selling companies based on their business practices and policies.
The DSA stamp today is recognized as a doorway to success. It is also considered a Field of security and safety for you-who may be a direct seller or a consumer It gives you an assurance that you are dealing with a company that take care of your interests


IDSA is a guiding light for direct selling industry and formulate dos and don’ts for direct sellers, customers and companies.IDSA has appointed an ombudsman to settle grievances and complaints. It works with consumer groups and decision makers to promote and create awareness about legitimate direct selling.IDSA undertake research and surveys to highlight the trends and bring out any issues related to the industry. Through the media, IDSA educate the common man about the direct selling.

Objectives of IDSA:
To protect the character and state of direct selling
To protect the customers and the direct sellers by adopting the best practices and code of ethics as described by WFDSA.
To protect the direct selling industry.

Companies in direct selling
There are now a lot of companies (fake ones too) in direct marketing these days.One need to acquire enough knowldge to identify which one is genuine and which is not.

A few names in legitimate direct selling which are approved by IDSA in India are:
Amway India Enterprise
Tupperware
Shriram DTH
Altos Enterprises
Oriflame India
Herbalife International India
Max New York Life
Hindustan Unilever Network
There are still many more companies which have established and there are a lot of companies which are going to start their business in India.

Direct Selling Industry

Amway was the first company to start direct selling in the world.
To know what Amway business is all about and how you can develop Amway business, it’s necessary to understand the basics of direct selling and multilevel marketing.
Across the globe, the range of products sold through direct selling (DS) is growing manifold. And the list is multiplying even as you read this information.DS in its different forms is followed in 165 countries, with a global turnover of Rs.4343bn and 62 million sales people as of 2010. In India DS is still in a nascent stage, with turnover of Rs.311Bn and 1.5million sales people involved in it.

Country DS___________ Turnover(US$)
USA_________________30.8 billion
Brazil_________________9.1 billion
Korea_________________9 billion
India__________________691 million

Direct Selling is a distribution channel and a business opportunity in which products are sold to the customers face-to-face. The sale is often combined with demonstration and testimonials, at a location and a time convenient to the customer, away from fixed retail shops.

Popularity of Direct Selling

Flexible work timings
Extra Income (Passive)
Rewards in direct proportionate to effort
Time for family and friends
Personal and professional growth
Customers get personal service and high quality products
Independence

Kinds of products sold by DS
World class products in categories such as:

Homecare
Personal care
Cosmetics
Kitchenware
Gift items
Jewellery
Garments
Nutrition and Health
Food items

…are today being offered through DS in India. This list is not exhaustive.

The Wellness Revolution

Believe it or Not! Wellness revolution is the next big revolution.
This revolution goes in accordance with the legendary proverb “prevention is better than cure!”
Few years ago Nobel Prize Nominee Paul Zane Pilzer, a world-renowned economist, a highly successful social entrepreneur, an adjunct professor, author of several top books and dozens of scholarly publications,told about an emerging $200 billion industry he called "wellness" and the next big revolution “wellness revolution” after the “computer revolution”.

Today, that industry has grown to $500 billion, and it's just getting started, offering even greater entrepreneurial opportunities.

The Wellness Revolution was the "shot heard round the world" for the wellness industry. It defined wellness as an industry—linking tens of thousands of disparate service and product suppliers with a single cause. It showed scientists, fitness providers, businesspeople, food manufacturers, doctors, and others focused on disease prevention and anti-aging that they were part of a worldwide revolution

Wellness Revolution includes more guidance and business advice for individual wellness entrepreneurs, health product distributors, physicians, and other wellness professionals. The Wellness Revolution features new action items in every chapter and covers major new trends, particularly the phenomenon of "sickness/illness industry" food companies such as McDonald's and Wal-Mart making huge investments in fresh and organic foods.

Wellness Revolution shows that even though millions of people have embraced wellness, the need for wellness has actually expanded due to declining health trends, particularly the rising cardio problems and obesity rate.

Medical costs now exceed profits for most large employers, and corporations are beginning to recognize that wellness and disease prevention are the only viable solutions to rising health-care costs that threaten their very existence.

Wellness Revolution and Products & services aimed at are:

Preventing diseases to happen
Providing the general well-being
Reversing the process of diseases
Anti-aging
Protecting environment

There’s still time to get in on the ground floor to associate and make fortunes in the wellness industry. It is predicted that the wellness industry will be the first type of industry to go beyond trillion dollars. And it is going to happen in the near future and is going to produce trillionaires around the globe.