The Difference Between Leaders, Distributors and Customers in Your MLM Business

This post is going to talk about the difference between leaders, distributors and customers in your network marketing business.  I want to share some of my personal insights on the subject to help you avoid some of the common mistakes that people in our industry make.  We’ll talk about each group of people, what you should know; why they are important and tips for success when dealing with them.

# 1 Customers

This is without a doubt the most important group of people in your MLM Team. This is where MOST of your long-term residual income comes from.  These are people who LOVE the products and are very loyal to the products and the company.  Most of these folks are retail customers and some are people who bought a distributorship just to get a discount on their purchase each month.

Most of these folks have no desire to build a business (not right now anyway).  They might share the products with their friends and family from time to time, but they don’t do it for the money. They do it because of their passion for the products.  I like to call these folks product evangelists.

Every business needs customers.  Your MLM Business should have tons of customers. For every distributor there should be AT LEAST 10 customers, and preferably much more than that.  If you are with a product oriented company, with amazing products, nearly half your team should be customers.  And at least half your monthly volume should come from customers.

If the only people in your team buying the products are distributors, you are with the wrong company and/or you are building your business wrong!

I should also note that some of your happy customers will eventually become distributors and maybe even leaders.  I also believe that happy customers make the best distributors.

# 2 Distributors

Distributors include anyone who is doing ANYTHING at all to build a business, even on a really small scale.  This might include retailers, part-timers, some-timers, and the person who sponsors even one person a year.

Many people who join your team are really just customers, even if they signed up as a distributor.  I consider anyone not doing anything productive to grow their business a customer, not a distributor; regardless of what membership they chose when they first signed up.  

I should tell you right up-front that distributors come and go.  They have little loyalty to the program or products.  Distributors are TEMPORARY income in your business.  If you look at most companies, distributor turnover in any given year can be 80% or higher.

Many of these folks come into the business to test out the waters.  Others hope to get rich quick. Many are lazy.  Many do not have the desire or skill-set to build a business. Most are not willing to put in the work.  Most are not true entrepreneurs.

Distributors are an important part of your team. They probably represent 40% to 50% or more of your total volume (and people) in your team.  Just remember that volume from your distributors is temporary income.

*** Please note I am not saying that distributors are bad people.

# 3 Leaders

Leaders make you money.  Leaders build huge organizations.  Leaders are doers.  Leaders move tons of products.  Leaders typically love the product line (but not always) and they are very passionate about residual income and building a large organization.

They are the one to five percent of your organization that has the desire, talents and skills to build it big.  Some people are already leaders when they join our industry.  Other leaders are developed through an effective mentoring program.

The real gauge of your long-term success in our industry is the number of leaders you have in your downline.  The more leaders you have the better.  Most top earners in our industry make most of their money from just two to five leaders on their team, even if they have sponsored hundreds of people and have a team with tens of thousands of people in it.

You always need to keep your eyes and ears open for leaders and potential leaders.  The best way to do that is to look in your back office and see what people are doing to build their business each month.  What people tell you they are going to do is irrelevant.  Actions speak louder than words.

If you want a big business, you need to become a leader first.  By doing so you will attract other leaders into your business and you will have the leadership skills to develop future leaders on your team.

In most cases, leaders only represent one to five percent of your team, and normally closer to one percent.  However, one good leader is worth their weight in gold!

My Thoughts

As a leader myself, my primary focus is on finding customers and other leaders.  I know not everyone else might use that same strategy, but I think it’s the best thing to do.  One of the biggest mistakes I’ve made in the past is working with the wrong people, spending too much time with someone who did not have the leadership potential, the work ethic or the desire to build it big.

Yes, I realize that distributors and part-timers are important, but I also know the income you earn from them is temporary and most of them eventually quit. That is why I like to focus on customers and leaders.  Customers typically stick around a lot longer than distributors.  Even better, a few good leaders is all you need to really build a large group. In most companies, just having one good leader can earn you a six figure income!

Final Thoughts

When it comes to network marketing you have customers, distributors and leaders.  All three groups of people are important, but the big money comes from finding customers and finding and developing leaders.

What do you think about this topic?  Leave a comment below to let me know what you think.  I look forward to hearing from you.

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Chuck Holmes


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10 thoughts on “The Difference Between Leaders, Distributors and Customers in Your MLM Business

  1. Emmanuel

    Great piece Chuck but can you please share the characteristics of the leaders? I think it will be very helpful. Thanks.

    1. chuckholmes Post author

      Leaders do the things they wish their team was doing. This includes prospecting, recruiting, retailing, inviting, following up and training their team. Most people think about their business, but leaders are DOING the business.

      1. Emmanuel

        Thanks for your response Chuck. But my question was intended to find out your thoughts on the characteristics of leaders or potential leaders while prospecting. How do you sift and sort potential leaders?

        1. chuckholmes Post author

          I look for people who have confidence, are respected, have money, have a large sphere of influence and are ultra-successful at whatever it is they already do.

  2. Greg Boudonck

    It is my belief that if you are strictly customer focused, you will find your distributors and ultimately, your leaders. The key is to always share the opportunity and take care of your customers.

    I have watched so many network marketers become so distributor focused that they lose sight of the primary goal of the business. Selling the products will create income for both them and the company. If a person stays customer focused, they are sure to succeed. I believe any other focus is a recipe for failure.

    Great post Chuck. Hopefully many network marketers will read and learn from this.

  3. Diamond Grant

    Customers are key. Some people become so laser focused on building a big business via distributors that they neglect to care for the customers. Treating customers well will grow your business without you having to do much work, because as you said they will be loyal to you and they will also share the product(s) with others.

  4. Mickiyas

    This is a nice post for beginning as well as advanced marketers alike. This is an eye-opener as to how to identify the right type of people to work with, and to focus on when you’re sponsoring or training/duplicating. As the saying goes “20% of your work produces 80% of your results”. If you focus on those two groups of people, you’ll be much more effective.


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