Who is Steve Raack our Gigfiliate CEO
"I grew up in an Amway household and love the peer-to-peer sales model." - Steve Raack
My love of the peer-to-peer sales model has always been there. I love the person to person side of things.
In 2006 I joined Herbalife. I worked with Arbonne and Beauty Counter for several years. I helped launched Beauty Counter with Greg. I also did consulting at other major MLM companies over the years.
I have hands on experience at twenty different MLM companies, creating strategies, reviewing data, doing compensation plan analysis and implementing data driven results.
This is the foundation of why I'm doing what I'm doing, this is why I've built with my team the Gigfiliate software suite for multi-tiered affiliate systems for others to use, because I truly believe in this.
I've been on the business, consulting and executive side of this peer-to-peer sales industry for quite awhile.
Evolution
"Change is inevitable. EVOLUTION, however is OPTIONAL." - Tony Robbins
This quotes sums up this MLM industry, we're trying to change but we are not evolving in our thoughts and our nature.
I look for ways to evolve this industry and use the best aspects of it.
This peer-to-peer sales industry started out as distributors because we did not have the infrastructure we have today.
In the beginning of this industry it was distributors.
Then technology started to innovate; personal computers, internet hand held devices and now social media.
Facebook and Instagram is now the new technology and it is disrupting how peer-to-peer sales industry is changing.
The big change in this industry came when small parcel distribution happened. Meaning we got door-to-door distribution rather than having to pick up product from uplines. We were able to cost effectively get products to people's doors.
We then moved from distributing products to then consulting people and a stage of advisory work and consulting. Pitching people on the benefits of product and having the infrastructure take care of the sales and delivery.
Look at the 2000 - 2010 cluster; Google, Amazing, Facebook, Twitter these new tools became available.
And then we have the influencer, leveraging social media algorithms.
We move from Distributors, to Consultants and now we're in the Influencers stage.
In the past MLM sellers represented one brand, Amway or Arbonne. Now most people are representing three to five different brands, they want to be an influencer. They want to be a person that has a lifestyle around fitness, or a person who has a lifestyle around beauty and fashion. These people represent more than just one brand.
My philosophy has changed, we don't represent one brand as a distributor or consultant. We are an influencer on a style of life that behaves well for us, we sell protein shake from this company and eye makeup from this company, a cbd bottle from this company and that should be okay.
We had MLM business in this industry in the past say you can't belong to more than one MLM business opportunity. Those days in my opinion are over, we should be encouraging people to represent whatever and however many brands they want.
If you just represent one brand you're selling instead of influencing. You're saying this is the best company and everything they do is the best, well not necessarily.
This is where we are today and the history of the MLM industry.
Why does the MLM industry continue to use compensation plans and business strategies from the 1980s?
MLM companies continue to build compensation plans based on strategies from the 1980s.
When an MLM company is saying I need a lead of field development or a head of sales, these folks have old mindsets from the 1980s and 1990s.
Phrase I've been saying for several years is "What worked in the 1980s does not work today. Actually what worked in 2017 does not work today."
It's time to evolve.
These are my opinions, I support my opinions with facts and data.
So I surveyed a lot of field leaders, I wanted to know who has been in the business a long time. In this particular survey we surveyed people who have been in the industry 3+ years.
90% have been in the business 3+ years.
76% are building teams.
64% of these people said it was harder to build their business today than when they started.
Only 17% of these surveyed field leaders said it was easier today than before.
Why is it harder to build MLM businesses today?
Reasons for Decline
64% of surveyed field leaders said MLM businesses are "somewhat harder" to "much harder" today than before. Why is this the case?
- MLM Stigma
- MLM Saturation / Relevancy
- Compensation Plans Too Complicated or Change Too Often
- Social Media Algorithms
- Prices Too High (+ Shipping Fees!)
- Tired of Rebuilding Their Teams
We are charging our most loyal customers are high shipping fees. A lot of folks were tired of rebuilding their teams, they're tired of their downlines taking their teams and leaving for other opportunities, ectera.
The Gig Economy
Approximately 43% of people have a side-gig. Nearly 70% of them are doing so for financial reasons.
What does the Gig economy do better than other businesses to scale? They use technology to leverage their services. Uber doesn't own all the cars, but they can give you customers to pay you to drive customers. For the gig worker all they have to do is open up the app and service customers. These new companies are using technology to enable the evolution versus the old MLM 1980s model.
This gives you the idea of where we see the trends growing with gig-economy in the US.
The percentage of Americans working freelance or part-time continues to grow.
- 1995 7%
- 2017 35%
- 2020 43%
The MLM Industry
"The MLM Industry is the birth place of the Gig economy.", I've heard this for many years.
When you look at the MLM direct selling industry, you can see it's $35 billion dollars annually in the US, these are the 2018 numbers.
When people hear that the MLM industry is $35 billion dollars they get excited, however this is not keeping pace with the Gig Economy.
Traditional MLM businesses are not keeping pace with the US Ecommerce or US Gig Economy.
In this graph the blue line across the bottom is MLM revenue, you can see it has no growth trajectory.
The orange line is the ecommerce business in billions of dollars in the US.
Look at the change that has happened in the Ecommerce world, the MLM industry is not keeping pace.
In 2007 MLM was 23% of Ecommerce, now MLM is 7% of these sales in billions.
Today we are not seeing growth in the MLM space, more people are joining the Ecommerce space.
As technology continues to make advanced and as more and more people join the Gig economy we are not seeing an increase in MLM space.
These are more indicators that this model is not the appropriate model for the future.
Average MLM Income
Again there a lot of people that will not touch the MLM space because of the stigma and reputation.
We are analyze data and not emotion. Analyzing the data we see that the average Gig economy earner is making $200-500 per month while the average MLM earnings is less than $100 per month.
Analyzing income disclosure forms from many different markets including jewelry to skincare to nutrition to homeware. 70% of people that enroll as MLM earners do not earn and are just discount shoppers. 12% of people make less than $300 a month, we call them hobbyists. There are 20% of people making $300 - $100 per month. 2% of earners make more than $1000 per month in the MLM space.
So 94% of earners in MLM make less than $1000 per month in traditional MLM businesses.
Why? It comes back to the stigma the compensations plans and the complexities.
The traditional MLM model makes it harder for earners when there are easier earning avenues out there now in the Gig economy.
Evolution is Optional
"Change is inevitable, but evolution is the place we need to be." This industry has to evolve with different approaches.
https://www.youtube.com/watch?v=fxpcnECFPGs