Today, I want to educate you about keeping an inventory in your network marketing business and share some of my best inventory management tips.
Depending on your business model (network marketing vs. direct sales) and your company, you will need to make a decision about keeping an inventory.
I should start out be telling you that I am NOT a fan of keeping an inventory in your MLM business. One of the reasons you see so many MLM products for sale on Amazon and eBay is because reps get stuck with a bunch of inventory they can’t sell!
I’ve heard TONS of horror stories from distributors who had a garage full of products that sat around collecting dust because they couldn’t find anyone who wanted to buy the products. That’s the last thing I want to happen to you.
For most reps, there is no need to keep an inventory. The whole purpose of doing network marketing is to let the parent company take care of that for you, along with fulfillment, order processing and customer service.
While they handle that, you simply focus on referring people to the company. You do the marketing, advertising and customer acquisition and the company takes care of the rest. That’s the beauty of our industry.
That being said, I do believe every distributor should keep a small amount of products on hand. This would include anything you might use for samples, for an in home party, or for products that you retail frequently.
For most people this would be no more than 3-5 different products in small quantities. I’m talking about no more than $200 worth of product, and that’s only if you are ACTIVELY building your business.
If you do decide to keep an inventory, be smart about it, and keep it simple, small and practical. Start out small and only expand your inventory if you have a steady demand for it.
The major benefits of having an inventory are that you have products on hand that you can sell (and deliver) immediately. Sometimes customers, or new distributors, don’t want to wait to get their products in the mail.
In other situations, you might makes sales to people who are buying on impulse. In both cases, being able to fulfill the order right away is paramount.
The major drawbacks of keeping an inventory are the cost and space. The last thing you want to do is tie up a bunch of your money on products that you’re not sure if you can even sell. In addition, an inventory takes up space; something most people don’t have an excess amount of.
Another thing to consider is how you build your business. If you are doing your business more as a direct sales business, then it definitely helps to have a small inventory on hand.
For example, reps using the party plan would probably want a small inventory of their best-selling products. In addition, reps setting up at events, and focusing exclusively on the retailing side of the business, might also want to maintain an inventory.
On the other hand, most traditional network marketing companies discourage it. They want you to keep your expenses to a minimum while they handle the inventory and fulfillment for you.
At the end of the day this is a personal decision. If you are set on keeping an inventory, I would encourage you to start really, really small.
Don’t go out and buy several thousand dollars worth of products if you are unsure you can even sell them.
Instead, start out with $100 worth of products and see what type of demand you have for them.
If you can find a way to continuously make sales, then by all means build up an inventory. If not, let the company handle it for you and just focus on finding customers.
The bottom line is to be a good steward of your own money. Never let ANYONE talk you into buying a large amount of inventory, especially if you are new to the business or industry.
What are your thoughts? Leave a comment below to let me know what you think. I look forward to hearing from you.
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- Join the Right MLM Company at the Right Time. Work with a Top Producer!
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