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Vetting Software for MLM Startups

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Article by: Steven Hooper
June 7, 2016

Choosing an integrated MLM software package is one of the most important decisions a startup will ever make. The decision is much more just than a technological choice. The overall structure of your company should be fairly simple. Your company should effectively take customer orders, ship products to customers, and calculate and pay commissions to distributors. You need a software solution that will support these processes and assist you in being successful. Based on my experience, here some points to consider when deciding upon a software solution.

Establish a clear vision

You need to have a clear vision of what your company is about, focusing on the following three facets of your organization:

Do you know what you’re selling? Products are the roots of your company. The sales channel and the distribution path of your product—from a distributor’s initial order to delivery to the customer—should be straightforward and unhampered. You need a software solution that provides a clear distribution path for your products.

Have you set your corporate culture? People get involved because they believe in the product, they want to be part of a community, they need to supplement their income, or they want self-improvement. You must develop the relationship between effort and financial reward. Determine the shared values and beliefs that characterize your organization, from the top levels of management to the part-time distributor. Do you want a large group of distributors to be rewarded with part-time income? Or do you want to reward a smaller core group of sales people with greater earning potential? You need to find technology that fits your company’s culture.

Do you believe in your compensation strategy? Compensation strategy determines how distributors build their downline business and provides an opportunity for them to meet their personal financial goals. You need to provide opportunity for distributors to meet their personal financial goals, whether they can make a little or make a lot. Paying compensation in an accurate and timely manner keeps your distributors happy. You need a software solution that will implement your compensation structure with precision.

Are you true to your vision? Too often, companies come to me and say, “I want to be like So-and-so Company, but better.” Don’t be that company. You have a unique voice in the MLM industry. You need a software solution that will enhance that voice and let it be heard. The best software solutions will not try to copy the other guy, but allow you to be you, while leveraging best practices identified and supported by your software partner.

Look to the future

Is your software solution flexible? No one software solution can meet all of your needs right out of the box. Be wary of companies that want to force your business into their structure. Look for a software solution that can be tailored to your specific needs, not a one-size-fits-all solution.

Do you want to compete in the global market? Only a small subset of MLM software solutions can properly handle international and global business activities. Transitioning from a software provider that only handles domestic business can be very costly and time-consuming. Even if you want to focus on domestic sales now, you should select a solution that can eventually let you expand into the global market.

Understand the total cost of your solution

Do you understand all the costs of implementing your solution? Some software vendors may quote a low cost up-front, then spring additional costs on you when you are committed. Beware of hidden costs. What type of add-ons are available and how much are they? What happens when you open up new markets? You want a vendor that will outline all costs up-front, including any subscriptions and add-ons.

Invest in the right technology

Is your software stable? You are investing in a solution that will be the backbone of your company, so you need a vendor that will be there for the long haul. I knew of one software vendor who created their product line solely on a proprietary platform. It was a great product until the platform ceased to be supported. You need a vendor who designs their software on a stable, scalable, and secure platform.

Can your software solution handle a bout of explosive growth? Hyper-growth is a problem that most of us want to have. However, the wrong software solution can hinder your growth if it can’t keep up with the demands of your business. You need a software solution that can scale as you grow.

Is your software secure? Data breaches at large corporations seem to make the headlines all the time. You need to make sure that your data is guarded by a trusted source. Investigate vendors that deploy a SaaS model for their software solution. The SaaS model gives the vendor the responsibility of maintaining and upgrading the software, with provisions for secure data and automatic backups.

Search for innovation without sacrificing values

Can your software solution adapt to changing technological needs? No one system will have everything that you need, so you should have a solution that will integrate between all components of your business. Stand-alone software is an obsolete model. You need a solution that will communicate with all processes: inventory and warehouse management, distributors and order taking, sales tax, and credit card management.

Will the vendor deliver what they promise? There are some tools out there that look great in a demo, but fall apart upon implementation. You need to vet a vendor by seeing how the solution works for other companies. Rely on the testimonies of other users. Remember not to be distracted by a beautiful user interface or superfluous tools that won’t provide what you need. You need a vendor who can deliver the business processes that you need.

Focus on what you do best

Are you spending too much time managing your software solution and not focusing on the growth of your company? It may be tempting to ask a programmer buddy to cobble together a software solution to manage your back-end while you focus on other areas of your business. I’ve seen this scenario play out in two ways, neither one ending in success. Either the home-grown solution becomes a quagmire that can’t keep up with the pace of the company, leaving you to move to another vendor. Or valuable resources are diverted to the development of the software solution. Companies in this situation find themselves becoming more of a software company than the MLM company that they had intended to be.

Does your software provider understand the unique concerns of the MLM industry? The MLM industry can be a tricky beast. Not only are compensation plans complicated to manage, but there are regulations to follow to ensure that your business operates on the right side of the law. A standard software system will not be able to manage the unique demands of the MLM industry. You need to be able to trust and rely on a provider that has the business expertise in the MLM sphere and can help you set best practices.

Your technology organization should support your business strategies, not limit them. Be sure to focus on your key strategies to determine what technology capabilities will support your goals and objectives. Make sure that your IT organization focuses on scalability, flexibility, security, and support, taking advantage of technology while avoiding fleeting trends. Otherwise, your software tools may create your process and your process may create your culture–whether you like it or not.

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Steven Hooper

Steven Hooper is a recognized network marketing industry name in technology and operational strategy and has the unique opportunity to head up the...

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