On the Level

The Internet as a Tool

One challenge for network marketing companies is how the company Web site should be related to those of each independent distributor. If customers are allowed to purchase products online directly from the company, are the distributors bypassed? What if people get confused and are unable to tell if a Web site is the official company site or one put up by a distributor? What if a distributor decided to make a bunch of outrageous claims on his or her Web site, marring the image of the whole company?

The best solution seems to be connected sites. At EcoQuest, the company has a well-designed site with full audio and video. Each dealer has a Web page linked to the main site, which becomes the point of access for distributors' own customers. The company controls the content, which dealers are allowed to customize. They may not put up independent Web sites. "We have the world's largest police force-our dealers are on the lookout [for nonconforming sites]," says Jackson. "When we find a maverick site, the dealer is asked to leave the company."

FlashNet has a similar setup, giving new distributors the software for a connected Web page to customize. When there's a new product, the company can update everyone's Web pages at once. However, nearly 500 distributors choose to create and maintain their own separate sites, and the company doesn't plan to prohibit that. "The Internet is an independent culture-we want to embrace that," Frey says. "We make an effort to honor the entrepreneurial spirit of those early adopters who created their own sites." About once a month, a company employee monitors all these sites to make sure they're not misleading.

Many companies now use the Net to streamline orders, revise forms (which distributors then print and duplicate) and communicate product information, all in the interest of increasing efficiency and reducing costs. Because many distributors still aren't online, though, that means running dual systems-which can actually increase the costs. That soon won't be a problem at FlashNet. "We're going to require reps to be online," Frey says, contending that a dual system is just not effective. "For those who aren't-we ask if this is really the business he or she wants to be in." It isn't that easy for companies dealing in more traditional products, where some distributors have been with the company for years but resist new technology.

"The Internet has excellent, awesome applications," Vitale says. Young people are catching on to that fact with MLM, lured by the prospect of earning $60,000 a year working at home. "Younger people are Internet-savvy, and they want to work with a company that's tech-savvy," he says. "We're teaching people about free enterprise."

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This article was originally published in the July 2000 print edition of Entrepreneur with the headline: On the Level.

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