Several questions about Amway Marketing
China Enterprise Strategy Communication Network (domain name:
http://www.glr.cn) Author: Lu Min Source: Site editing time: 2004-9-8
Engaged in Amway sales operation only takes 101 yuan to do a card. At first, it seems that the sales of Amway does not need to rent a door. It does not need to pay for the goods. It does not need to be transferred. It does not need to purchase the relevant cost of the agency right. Amway has a good learning team and internal mutual aid mechanism, and also has a very comprehensive remuneration. The system, highly free entry and exit threshold, very low business risk. Amway's system seems to be impeccable. The development situation of Amway's sales in China is also very good. In fact, Amway may have the following issues.
First, policy issues
(1) The introduction of the direct sales method may be forced to partially adjust the transformation
In foreign countries, there is no distinction between the two concepts, direct sales and pyramid schemes, which are not substantially distinguished, and the concept of direct sales in China is mainly based on China's existence of many Chinese government a headache. Illegal pyramid scheme. Illegal pyramid schemes are related to the interests of vulnerable groups. It will affect social stability. Because illegal pilot is often a laid-off worker, farmers, retirees, etc., and these people are also very concerned about the government. From the current form of direct sales, mainly with the multi-storey direct sales model represented by Amway and the single-storey direct sales model represented by Avon, Avon and Amway are also forced to transform by a government ban in 1998, but Avon's transformation is relatively much more than Amway, Avon's number of stores opened in China is much larger than the number of Amway's stores. In contrast, the Amway's store is more like the role of logistics turnover, the main sales force is still multi-storey sales staff, and it is still selling people. The date of the introduction of the national direct sales method is getting closer, the direct sales method must make further standardizations in the current direct sales industry, starting from the principle of government robustness, it is likely to take balance between Avon and Amway's direct models. Methods, for Amway, although the concerns of direct sales are not, existing operating modes need to make further adjustments and modifications are still possible.
(2) Can you get long-term support?
Even if the direct selling method is introduced, it is not possible to ensure that the direct sales of Amway can be permanently supported in China. The "MLM Management Measures" issued by the Chinese government later did not ban with a ban? First, Amway takes the direct mode, and the company in traditional sales model needs to be stored in the store and the warehouse. On the one hand, the cost of sales is increased. On the other hand, from a macro perspective, the national tax also increases, and also Place more social employees. If the direct sales mode is increasing, it may not just a simple problem, but an issue affecting the overall coordinated development of the economy, it is possible to cause the national macroeconomic decision-making concern, and will carry out the pros and cons. Policy guidance. The Amway emphasizes team learning. It is necessary to integrate into the team. In order to enter the core, Amway's sales staff often meets learning, one side is learning, and on the other hand. Those who have participated in the Amway Success Conference will have an experience. The Amway's successful conference is unprecedentedly enthusiastic. In the eyes of people outside, it is simply unreasonable religious fanatic molecules. Due to the very low threshold of the Amway sales staff, as long as you are adults, no matter what you are, your job, you can join. If there is any other person who is interested in the Amway's sales group, use the meeting time, publish some anti-socialist anti-party slogans or theory, will cause a very bad impact, especially the current state of the political situation of stable unity. When an important agenda, if there is a lawlessly used the Amway's conference form, the legitimacy of the Amway's marketing model may be questioned, because at that time, the state first considers politics rather than efficiency. Second, the business problem
(1) The growth of the market and the growth of sales staff are not synchronized
The growth of the Amway sales market is linear growth. It is impossible to grow significantly over a certain period of time, which can only be gradually increased, but the salesperson of Amway due to the Amway sales mechanism, is an extreme growth. Entering the threshold of Amway is very low, it sounds very attractive, it can also be done as a second occupation, and this operational mechanism has urged the superiors to develop the lower-level departments to do their best. Therefore, when the Amway's development situation is good, the salesperson's growth rate will definitely exceed the growth rate of market share.
(2) internal control
Due to the great sales team of Amway, Amway's management is basically a loose management, doing extremely freedom, for Amway sales staff, there is no strict company charter. keep in mind. Such a large and loose team, the internal control mechanism must be very difficult to do well. First, Amway may face the risk of hob hit market. In China, this fake ability is relatively strong, you can't say that this situation will not appear. If the market has appeared in the market, the price is very attractive, and the price is very attractive, and the problem of the true and false people of the pills are difficult to distinguish, and some people may have true and false, which is more dangerous. Second, Amway is facing the market and malignancy competition in different marketing departments of the company's marketing team. Now some salesperson have sold the Amway products to seven fold. More than 20% of customer service compensation, for new sales staff, no performance, only 3-6% of sales commissions. According to the current remuneration system of the Amway, the 30% sale is absolutely unseained for new salespersons. Only sales of large-selling users can have sales advantages. If the internal price war is, the more fierce, the sales personnel of the newly added sales staff are It may be difficult to step, although Amway has also hugely selling low-cost sales, and the sales team is so huge, it is more difficult to monitor this problem. The third is the competition between different sales factions. Although Amway has a good mutual aid mechanism between the upper and lower levels. However, the large-scale perspective, Amway's sales group gradually differentiates into some factions, there is no interest interaction between factions and dispatches, only interest and market conflicts. For example, when the local market is developed, the diamond leaders as this department will find a new team to come to a new city development to conflict with the original market development team of this city. 3, the risk of imitation of other companies
In my opinion, Amway did not have a deep corporate culture advantage, more direct sales operations and compensation mechanisms. If other companies are also selling daily necessities, ignoring the factors of Amway's brand factors and product quality competitiveness (as long as the other party has enough industries, it is not a difficult thing to achieve this.). Then there will be a problem that the same industry is competitive on the same mechanism, and the advantage of Amway will no longer exist. It will be more and more companies like the US Kailin, and the imitation of the Amway Mechanism does not have to worry about infringing intellectual property rights, and there is no high technical barrier. Sometimes it mimics corporate culture may be difficult, but the mimic operation mechanism is relatively It is easy to say much easier. If the market positioning of the emulates is similar to the Amway company, the Amway's market share will inevitably compete with a company with an advantage of the same mechanism with Amway.
Third, development issues
The Amway's operating mechanism adapted to the current market situation. With the arrival of information society and the continuous development of management science, Amway's operating mechanisms do not necessarily adapt to the future situation.
1. Amway's direct sales model and government procurement, the development trend of the group procurement is not harmonious
At present, from the field of public procurement, the trend of government centralized procurement is increasingly obvious, like the World Bank, Asian Development Bank and other international organizations are also very high in concentrated bidding procurement. From the development of personal procurement, the development prospects of online group purchase are also very optimistic, dozens of families will collect large parts through intermediary agencies. From the perspective of corporate procurement, it is the same as the third-party logistics development, which has long been the third profit source of enterprises to reduce costs. And concentrated procurement generally needs to purchase the form of bidding, the same grade product, who is the price, who uses the product. At present, there are many big expenses in the bidding, and the content of centralized procurement will be more and more, and the daily daily necessities of government agencies, families, and enterprises may implement bidding procurement. The sales price of Amway's unified region is clearly not dominant in bidding procurement. If the Amway takes a bidding in the form of a special price, it will also affect the sales performance of the sales team, and naturally affect the development of the sales team.
2, online shopping and current sales mechanism may have conflicts
Amway has also implemented online procurement, if online shopping With the continuous development of information networks, Amway's current sales mechanism may not adapt to online procurement. First, we must solve the problem of the performance of the sales of online procurement. Second, after solving the purchase form of online procurement, how to ensure that people's sales team do not decline, and enthusiasm is not brownies. Coupled with the impact of store sales, the impact of peers competition, people have gradually shrunk to people's sales team, the so-called hereditary flower red has become a paper empty talk. 3, the traditional sales industry is also changing
With the continuous development of logistics technology, the continuous change of marketing concepts, the management cost of traditional sales industries, transportation costs, and storage costs are constantly decreasing. Especially some large-scale warehouse supermarkets and chain convenience stores have also enabled the profit of traditional sales industries in sales links. Relatively speaking, traditional sales industries will now be more and more flat, management is getting more and more fine, and the competitive advantage of the direct industry will also be more obvious. Amway can say that the high profits have given the sales team to inspire the sales team, reflecting the advantages of people selling people. Rough calculation, 20% of customer service compensation, 21% sales commission, 4% leadership bonus, and Pearl Awards, Jade Award, Diamond Award, etc., add a profit from the sales system to be close to 50%, Coupled with marketing advertising, management fees, warehousing fees, logistics costs, and Amway can only take high quality and high price sales strategies. This mechanism determines that Amway is impossible to fight prices with other companies. When people are more and more understanding of Amway's mystery, Amway's market advantage may also disappear.
Fourth, institutional problem
The Amway's system has many advantages that the traditional company does not have. In some people, Amway's bonus remuneration is the most reasonable and most reasonable. In fact, the system of Amway is very unfair, but it is more concealed. .
(1) It is difficult for the underlying sales staff to make money
For newly joined Amway Marketing people, he directly faces customers, he is more difficult to deduct tax proportions and customer service payment each month, it is more difficult to do 6%. To achieve 6%, the average month must sell 5600 yuan Amway products (in average tax proportion of tax), even if the average 1 customer bought 500 yuan, you have to do 11 customers, you In addition to 8 days of rest time, 22 days working day, you have to do a successful business business every 2 days, but sales is not certain, even if you are lucky, there is 1 one to buy you every luck. Products, you have an average of 2 customers for sale every 1 day. Even so, how much is the money you can get, 420 yuan. This also deducts your transportation, telephone bill, rental fee and other cost expenses. With a customer 5 yuan, the cost of 64 customers is 320 yuan, then only earn 100 yuan for one month. . As long as you have no performance, Amway can calmly not give you a marketing fee. However, what is the money that the upper leader can get in accordance with this sales volume, 5600 * (0.21-0.06) = 1008 yuan. And their cost expenditure is relatively low, and it is equivalent to 1000 yuan from the bottom sales staff. The underlying person is 100 yuan, and the upper leader is 1,000 yuan. In addition, the upper leaders can also take 4% leadership prize based on this sales volume, as well as the Red Gemstle Award, Pearl Award, Emerald Award, Diamond Award, these are not available. They are more than 10 times on the basis of your sales. If you do less than 5600 yuan for sales in a month, then it is almost white. If you are full-time to do Amway, you have worked hard for a month, you didn't make anything, although you didn't lose money on the surface, but from the perspective of opportunities, you will go to other work for this month. You may have a relatively stable but not too much salary hope, suppose you are a workman, press 1,000 yuan for a month, then you are equivalent to a loss of 1,000 yuan this month, and if you are A middle-income teacher, doctor, department manager, etc., then your relative loss may be 2000-3,000 yuan. The underlying sales are there to be a risk of financial risks, security risks, default, but to undertake the risk of business. This risk has a certain concealment, and salesperson often will not blame the company's system, will only blame their ability, because there is so many successful precedents in front of you. When you can't hold it, when you give up, the leader will say that you are not successful because you don't stick to it. However, in fact, some people's ability can improve, some people's ability is difficult to improve, some people can insist on not take a penny one year, some people can't do it. (2) The system design is obviously reflected in the upper layer.
It is also a net sales of 4,000 yuan. Your pioneering funds are only 120 yuan, but your upper silver chapter or more leaders, he also sells 4,000 yuan products, he can get the pioneering funds of 840 yuan. The difference is 720 yuan, and it is also sold. For the underlying personnel, it is necessary to make a customer, it is more than rare, first of all, you don't have some experience, and his performance is that, others are willing to believe him. In addition, even the superiors are afraid of seven fold, and there is also a lot of money, but also have money. The underlying personnel are difficult to compete with him.
(3) Selling products is not as good as developing subordinate departments
There is such a mechanism, and the smart people will definitely understand that in a line of selling products, it is the most stupid, otherwise you will never get rid of the tray. You will feel that it is better to collect several apprentices with it to sell products. The most basic functions of the sales team should be selling products, and the sales team of Amway is putting the main energy in the expansion of interpersonal networks. The sales team does not sell, and it is not very conforming to common sense. (4) The majority of underlying marketing staff have also become a customer
The Amway has always emphasized that if you want to achieve performance, you must start with your own use of Amway products. If you have your own use, you have a personal experience, convince yourself to convince others, these truths are right. But this is actually a trap of Amway, because the Amway's threshold is very low, you can say that you will have the opportunity to do Amway, and it looks very simple, and the work of Amway is very simple. It is not very deep. Search, especially when he is attracted by his compensation system, Amway can make money psychology. The sales mechanism of Amway will cause sales groups to pull people in desperately, because only this can get high salary, this multiplier growth is amazing in the water's duckweed. While these people are learning to sell, they have also invisibly become Amway's product consumers. Because the quality of Amway products is good, the price is not low. He is easy to inspire your consumer desire, Amway's interpersonal network itself is the same as the advertisement, the effect is also very obvious. However, when the salesperson joined the Amway, the consumer grade was high, and the funds for daily necessities also increased a lot. Although there is also a laid-off worker in Amway, retirement is successful, but the success of the success is a few people, most of the salespersons are both a Poor cheap seller that has become an Amway product of Amway products.
(5) The probability of the diamond is small
Amway seems to be equal to anyone's opportunity. No one wants to become a diamond marketing manager, you can get more than 800,000 annual salary, and you can inherit, especially behind, the world attack, big stimulation The appetite of people who want to be willing to win. But how much can I really get the diamond? Below, I take Nanjing as an example to do a rough estimate. Look at how many markets in Nanjing, how many silver charter, Director Jin Zhang, Director of Jinzhang, direct directors, can produce how many jade business managers, how many diamond business managers can be produced. (SP: Net of monthly business reached more than 70,000 yuan; Jin Zhang business Director GP: The net total business has reached more than 70,000 yuan for three consecutive months; Director Director DD: six months in the year The amount reached more than 70,000 yuan, three months of continuous; Emerald business manager: The lower department has three direct senior business director; diamond business manager: The lower department has six direct senior business director.)
Table (1) Amway's market development funding and sales measurement
From this point of view, to reach SP (21%), the total actual sales is not less than 116666 yuan.
Table (2) Amway's market development funds and sales of customers
From the measurement case, you have to achieve SP, you and your department will do 389 customers to achieve it.
Assuming Nanjing total population is 6 million, 2 households in the bottom of 100 households are Amway's faithful customers, and the average population of each household is 4 people (father, mother-in-law, father, mother, child, I And a total of 7 people, considering your elders are also your elders of your brothers, converted into 4 people).
The total number of customers currently developed in Nanjing is 6 million ÷ 100 × 2 ÷ 4 = 30,000. This can be estimated, directly facing the number of SPs (because there is a problem in the SP verification to drive the last level, the SP is also realized, so it can only be said to the market, the most basic SP number) 30000 / 389 = 77 groups. According to the above estimation, the number of silver chart in Nanjing directly oriented the market is only 77.
According to the fact that the Amway's current assessment SP can be superimposed, Nanjing can only produce 77 Yintuan Camp Ocean. It is possible to reach a 3 month to account for 0.75, then there are 58 gold chapter business director who directly face the market. The ratio of 0.5 is achieved in 6 months within a year, then the number of senior business director DD is 39. For example, A-B-C-D (SP), if D is the Director of the Silver Chapter (SP), then A, B, and C are the probability of the silver chapter business director is also relatively large. Temporary with a structural hierarchy of SP is calculated in a 4-layer structure.
Table (3) SP number measurement
It can be seen that according to the above ratio, the number of SPs produced in Nanjing is 92-114. There are about a matter of about Nanjing, there are 103 people to become the Director of the Yinzhang Operation.
Table (4) GP quantity measurement
According to the above, Nanjing can produce the number of GPs probably 70-86. Probably Nanjing can produce 75 gold chapter business director. Considering that the last level of SP does not accidentally, it can become GP, so the above converts may be low in the second floor, plus a number of modifications 5, estimated that Nanjing's Jinzhang Director probably produces 78 .
Considering the previous level of GP, it is generally no accident, and DD can be done, so it is estimated to be based on GP.
Table (5) DD number measurement
According to the above, Nanjing can produce the number of DDs from 51-67. Probably Nanjing can produce 59 high-level business director.
Table (6) Number of jade business managers
Recommended business representatives must have more than three DDs to become an emerald business manager. The three departments have become the DD probability is temporary to 50%. Big, the number of underlying jade is probably 39/3 * 50% = 6. The number of converted layers should also reduce one layer. The superior has become a DD probability is also scheduled to be 50%. The number of emerald can produce from Nanjing is 8-10.
Table (7) Quantity Measurement of Diamond Business Manager
The recommended business representative must have more than 6 DD to become a diamond business manager. Six departments have become a DD probability is temporary to 30%. So the number of underlying diamonds is probably 39/6 * 30% = 2. The number of converted layers should also reduce one layer. At the same time, six sectors have become DD probability is also scheduled to be 50%. The number of diamond business managers that can be produced in Nanjing is 3-4.
Note: 1. The number of diamonds and other prizes in the above may be less than the actual number of diamonds. The main reason is that many departments in Nanjing have also developed the market in Nanjing, and some have also developed Northeast, Fujian. , Jiangxi's market, so the population is less than the number of actual consumers.
2, the above measurement, the number of population, the average population of each household, and the Amway used in each hundred people, the average per month consumption, etc. Some data is estimated.
As can be seen from the above analysis, the salesperson that can truly do diamonds is a very few people, and the share of the market determines that Amway is not possible to produce a lot of diamonds. Although the market recognition of Amway products increases with the improvement of living standards, the number of diamonds increases, but in general, it is impossible to have a multiplication.
(Author Lu Min, welcome you to explore your point and opinion with the author, electronic mailbox: kkkkllmm@sina.com)
