Meet the new paradigm: network marketing in Japan; Can American-style marketing work in Japan?

Japan, Inc., Nov, 2004 by Yusuke Imura

Changing business as usual

One of the most telling events illustrating the differences between the accelerated American style of network marketing and "business as usual" in Japan was a presentation Proctor gave to Japanese wellness consultants (distributors) at their Tokyo headquarters. The talk focused on the distinct difference between building a business and trading time for money.

"There are three ways of making money in the world," says Proctor. "M1, or trading time for money through labor, M2, or investing money, or M3, building your own business. The M1 group can include anyone from plumbers to physicians, or 96 percent of the population. M2 includes professional investors, at 3 percent of the population--but this route requires a higher start-up capital. Finally, M3 wealth builders account for only 1 percent of the population, but generate the lion's share of income."

Network marketing, with the right opportunity, offers people a chance to earn M3 income with a low initial investment. This business-focused presentation, coupled with the outline of a simple business model that would allow distributors to quickly recoup their initial investment, struck the audience like a bolt of lightning. This was something totally different.

In the three and a half years since Nikken's reintroduction to the Japanese market as a network marketing opportunity, momentum had not reached the scale seen in North America. Business had been built on the back of retail sales and personal relationships between consultants, as opposed to a pure business-building perspective. Many of the distributors, while successful retailers, had a hard time approaching Nikken as a business.

Thus, a simple and effective presentation from a successful female North American business builder in Tokyo, and in Japanese (thanks to the interpreter), gave a noticeable charge to the crowd. In addition to being for our own benefit, Nikken signed up several driven business builder distributors that night as a direct result of Proctor's presentation.

On our way

Proctor's visit ended successfully, with several promising leads and a much greater understanding on our part. Inspired by her generous gift of time, we decided to commit ourselves to reaching the first "leadership level" within our organization within two months. The rank, which required a substantial monthly sales total as well as the recruitment of several qualified distributors, is the first major step toward developing a larger business. In the end, it took us three months to achieve this level through a combination of recruitment and sales activity.

In addition, our introduction to Nikken was the start of something larger for both of us. Previously employed at large Japanese corporations, both my wife and I had desired to leave behind the rat race, long commute and stress of Tokyo corporate living. Our start with Nikken opened up our thinking to other possibilities for growth.

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In the end, after much planning, we decided to incorporate the Nikken business, my wife's translation and interpreting business and several other projects into one large umbrella corporation, which would employ us. The goal was to both provide us with a corporate vehicle to house our businesses, making it easier to conduct operations in Japan, and to provide a way to better utilize the tax benefits available to small business owners.