MLM Auto Ship Policies are Bad for the MLM Industry

by Chuck
(MD)

I watched a YouTube video the other day by Dale Calvert. He was discussing why he thinks auto-ship is bad for the MLM Industry. In essence, he said that forcing people to go on auto-ship kills your retention rates. In fact, most people who go on auto-ship will cancel their auto-ship order within two to three months and quit the business. I agree with him.

I think it’s a better idea to ease your customers and distributors into the business. By forcing them to spend $100 to $300 (or more) each month on auto-ship, you are forcing them into negative cash-flow. Sure, some people might disagree with this, and that’s okay. But if you look at your genealogy report, you will probably notice a similar trend.

Instead, I think it’s much wiser to slowly introduce your company’s products to your distributors. Let them place and order when they join the company, and then order products as they need them. This will give them time to incubate in the business, and learn the basics.

Personally, I’d rather have my downline stay in my downline for a longer period of time, even if they weren’t ordering products every month. This will help build their belief level in the company and in the products. Over a period of time, many of these people will go on auto-ship. But I think it’s best to let people make that decision on their own.

Another common mistake by MLM Companies is forcing distributors to go on auto-ship, just to be eligible for their bonuses and commissions. Personally, I don’t believe there should be any personal consumption requirements to earn a commission from your downline. If you build a large team, you shouldn’t have any personal consumption requirements, just to get paid your commission check.

As Dale Calvert mentioned in one of his YouTube videos, the auto-ship requirements are having negative consequences in the MLM Industry. I agree with Dale and think MLM Companies should seriously reconsider their auto-ship policies that force people to sign up for auto-ship in order to be eligible for bonuses. What are your thoughts?