The Picks and Shovels Business in Network Marketing

About four years ago, I decided to get involved with the picks and shovels business in the network marketing industry.  Before that, I had just focused on building a downline.

What inspired me to make the change?  I had just read a book that talked about the people who got rich during the California Gold Rush were the people in the picks and shovels business.  I don’t remember the title of the book, the the information blew my mind.

It was the folks “supplying, feeding and taking care of” the Gold Rush Prospectors that made the most money during the Gold Rush.  The folks who owned the saloons, restaurants, hardware stores, brothels and other support businesses were the ones who did best financially.

While a few prospectors found gold and “made it big” most did not.  Most of the prospectors returned home broke and defeated.

I think the same concept holds true in network marketing.

Let’s face it, there are MILLIONS of people in the MLM Industry worldwide.  And most of these distributors are struggling and looking for ways to build their business.  In most cases, they are not looking for a new business opportunity (they already have one) to join, but they are looking for tools, leads, systems, training and other resources that can help them grow their network marketing business and make more money.

And that’s where having your own picks and shovels business really comes in to play.

While I think it’s very wise to build a downline, I think there is even a greater opportunity in selling leads, systems, tools, and training materials to other network marketers.

Study the top earners in our industry and you will quickly discover that’s how they make most of their money.

They sell systems.

They sell training courses.

They sell seminars.

They sell coaching.

They sell leads.

They sell affiliate products.

And the list goes on!

In fact, many top distributors STOP building their downline and shift their focus on just selling the picks and shovels to other network marketers.

Ever wondered why?

It’s because the picks and shovels business is very profitable.  And you have less competition. And it’s a much easier sale than trying to convince someone to join a business opportunity.

You won’t get the constant rejection.  You won’t deal with constant attrition.  And you get paid today, rather than having to wait two to five years to earn a nice residual check.

Another thing you need to know upfront is this.  MOST of the people you approach, even if you are a good recruiter, will NOT join your team or buy your product or service.  If you don’t have a way to make money from them, you are leaving a LOT of money on the table.  This is where the picks and shovels comes in handy.

Am I saying you should give up your downline building efforts to focus on the picks and shovels business of MLM?  Of course not.  I think it’s a smart move to build a team of customers and distributors.

But, I think it’s even more important to have multiple streams of income.  I think it’s good to have 3-5 solid income streams, in case you ever lose one of them!

Why not have a way to make money from the people who tell you NO to your products or business opportunity?  Why not have multiple streams of income and diversify your income?

Even if you are a master recruiter, most of the people you talk too will NOT join your team or buy your company’s products.  But many of these folks would be interested in private coaching, a training course, a helpful system, quality leads, and countless other things that help them with their business.

And if you have these different things to offer, some of your prospects will buy them from you. This is a win-win deal as I see it.

And then you can always offer your business opportunity on the back end.   In other words, after someone buys some of your picks and shovels, you can always offer them a chance to work with you in your business.

After all, someone who invests in their business education, or buys leads, or buys training, is really a good prospect.

This is the exact same strategy I use on my website.  Yes, I offer my business opportunity on my website, but no, it’s not my primary focus.

I make money from 10-20 good income streams and realize that MOST people who visit my website will not join my business opportunity (even though it’s good).

So, I have additional products and services (picks and shovels) that I recommend such as:

**** Visit my Resources Page to Learn More!

If I ONLY offered my business opportunity online, I would probably starve and be out of business in no time!

But, because I sell the picks and shovels, I make immediate income, have multiple streams of income, and build my business on auto-pilot.

Everything I’ve talked about in this post is geared toward people building their business online.

But, you could use a similar strategy offline as well.

The bottom line is that the picks and shovels business is where the money is at.

And it’s not just the network marketing industry either.  This applies to most businesses.

Do you think car dealerships are in the selling cars business?  Guess again.  They are in the service business, along with the trade in business, financing and selling warranties and upgrades business.  That’s where the make the real money.  They make very little money selling a new car.

The same holds true in the electronics business.  These big chain stores that sell electronics don’t make much from the sale itself.  They make their money selling the contracts, upgrades, extended warranties, and repair jobs.

I think the picks and shovels business holds true in just about every industry, not just MLM.

So, here is what I recommend you do.

If you are building your network marketing business online, start out by finding ONE affiliate product or service (instead of your MLM Company) that you can promote.

Focus on promoting that product and then offer your business opportunity to the people who request more information about that, or buy it.

Those are great prospects.

Following this strategy will lead to less rejection and stress.  And you will make more money.

My # 1 picks and shovels business is my business Elite Marketing Pro.  I’ve been promoting this program since 2009.  It used to be called Magnetic Sponsoring.  You should check it out if you haven’t done so already.

This gives me immediate income while I am generating leads for my primary MLM Business. People who purchase this program provide me $118 per sale.  Plus the program comes with 9 different products that I can promote, so I make money from recommending those as well.  I think it’s a win-win deal.

I hope this article helped you understand the importance of having a picks and shovels business in your MLM Business.

What are your thoughts about all of this?  Please leave a comment below and tell me what you think.

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12 thoughts on “The Picks and Shovels Business in Network Marketing

  1. R.G. Westerman

    I see this a great deal in the freelance writing market. Lot’s of websites looking to sell people kits and books about how to become successful as a writer. My first impression is that this is ‘cheating’ in a way. Perhaps I should revisit the idea. I need to figure out what my ‘picks and shovels’ are.

    Reply
  2. Greg Boudonck

    This is great information Chuck.

    In network marketing, I have often discovered that when we talk to people many times they are involved with a different network company. By using the “picks and shovels” system, we can still sell these people without cutting in to the company they are with. There are many tools that can be helpful to network marketers from separate companies. Training, consultation, motivational tapes, and software are all great tools that could be sold as a secondary income.

    Reply
  3. Tee

    How can customers purchase the affiliate products you promote in the newsletter you mail out? Do you have a beauty blog for Avon or something?

    Reply
    1. chuckholmes Post author

      They purchase it from the affiliate link in your newsletter. If it is emailed, they simply click on the link. If it is mailed, you buy a domain name and forward your affiliate link to that domain name.

      Reply
    2. chuckholmes Post author

      No, I do not have a beauty blog for my Avon products. I focus on selling picks and shovels to other network marketers.

      But, there is just as much money to be made selling picks and shovels to customers and potential customers for beauty products, wellness products, etc.

      Reply
  4. Tee

    For months I have been looking for that perfect company, but in actuality, there’s no such thing. I chose Arbonne because I found a good local sponsor, and I feel like I could educate health and wellness through the company. My main concern is the expensive price of the products and the start up costs to join the biz op. Like you said, sell the picks and shovels to ppl in MLM because most won’t join your business, especially if it has high start up costs. I just feel as though it’s important to join multiple companies on the retail side offering a range of prices because a lot of people can’t afford Arbonne, eventhough they may love the product. I’m just looking to fill that gap. Something I can offer the people who can’t afford Arbonne. But your newsletter technique sounds great. Do you mail this newsletter to customers and people on your team?

    Reply
    1. chuckholmes Post author

      I’ve always made more money with the picks and shovels than I did with my MLM Company. Granted, I’ve made good money with my MLM Company, too.

      However, most MLM Companies will take a FEW YEARS to build up a nice income.

      During that time, you still need a great way to make money and have multiple streams of income.

      If you only have money from your MLM Company, you don’t have a way to make money from the people who tell you NO.

      And no matter how good you are at retailing or sponsoring, you will have more people tell you NO than tell you YES.

      Reply
    1. chuckholmes Post author

      Create a newsletter that you mail out. If you sell Arbonne, for example, you could have a beauty newsletter that provides tips, tricks, etc. In your newsletter, you could promote beauty products, affiliate products, books, etc. (all that you make a commission on). That’s what I do and it works. Many people who won’t buy the products from you will buy other things that you recommend. You could also sell your own information products about beauty, and talk about your Arbonne products in your information products.

      Reply

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