DESIGNING YOUR BUSINESS

It is everyone’s business goal to maximize the sales with the minimum cost.

Multi-national firms have challenges in common: SG&A tends to be much bigger than local Japanese firms’.

WHY? - You need bilingual workforce. They are rare and expensive. More importantly, we did not have any access to multi-national firms. In lieu of hiring own people, our clients use our services to maximize their contribution margin. Although payout ratio against net sales is more than 60%, some of our clients still enjoy much contribution margin.

We are here to change your fixed cost to variable cost. Stay focused on growth initiatives and maximize service level with minimized cost!

UNCOMPROMISING CUSTOMER SERVICES

It’s our industry standard to have an ability to design compensation plan and its driving MLM software development. But Miyako Solutions is the one and only agent who offers in-house Customer Services. We do not outsource call center duties, which results in accumulated MLM knowledge and expertise.

development
server
customer services

  • Work-flow development

    ・Finalizing Business Rules
    ・Work Flow set-up
    ・Script Writing for Call Center
    ・Training Materials for service harmonization

  • Application Handling

    ・Key-in DistApp & Order Forms
    ・Order Audits
    ・Change Request Processing

  • Call Center Task

    ・Order Taking and key-in
    ・Compliance issue handling
    ・All Distributor Relations

  • Order Processing

    ・Account Receivable
    ・Finalizing Volume Points (Batch Run)
    ・Creating Shipping Instruction

  • Autoship Control

    ・Autoship Creation, Changes & Cancel Processing
    ・Account to Account Transfer Processing

  • Shipping Instructions

    ・Printing Shipping Invoice
    ・Picking & Packaging
    ・Courier Management
    ・Inventory Management
    ・QA/QC

  • Bonus Calculation

    ・Commission & Bonus Check Run*
    ・Commission & Bonus Statement*
    *For local clients that we offer packaged software & customer services

  • Product Return

    ・Cooling-off / Buy Backs
    ・Returned Inventory Audits
    ・Negative Adjustment

MARKETING SERVICES THAT WORK

To raise Brand Loyalty within distributor minds, it’s crucial to provide appropriate marketing services. Marketing services may include:

  1. Easy-to-understand “How-to-Do Business” Brochure
  2. Well illustrated, yet Pharmaceutical Law compliant Product Catalogue
  3. Periodical release of a newsletter that increases retention
  4. Event initiatives to motivate business builders
  5. Movie files that represent company vision and mission statement
  6. Interface development that helps distributor daily activities

Please bear in mind that Japanese people have different spots to hit. You may need to modify your marketing materials to hit their spots. Some localizations will make a huge difference.

COMPLIANCE SERVICES THAT SECURE BUSINESSES

To run Network Marketing in Japan, the Act on Specified Transactions and the Pharmaceutical Law are 2 major regulations you have to be fully compliant with. Expressions that are allowed in the US may not be appropriate in Japan. To be specific, major differences are:

  1. You must discover your “Will” as to approach prospects. You must NOT hide your reason of your approach.
  2. You must hand out a legal document “Gaiyo-shomen*” before signing up.
  3. You “almost” cannot illustrate income numbers on any advertisement.

To reduce risk, you need to be familiar with Consumer Affairs Centers. In accordance with the Consumer Affairs Fundamental Act, they handle consumer issues or conflict cases. Our 12 years of experience has created a good nose to confirm any risks before it would be detrimental.

Gaiyou-Shomen describes the key factors of the MLM businesses, e.g. products, prices, special burden (required initial amount), how to order, product return and buy back policies, marketing plans and its conditions to receive commissions and so forth.

SYSTEM DEVELOPMENT for MAKING A DIFFERENCE

We have been in industry as a Network Marketing System Developer since our start. Our experience and expertise might be helpful for below key areas:

  1. Double byte Distributor information table for printing materials such as shipping invoice and Commission / Bonus Statement
  2. A/R function – Cash on Delivery, Account-to-Account Transfer, etc.,
  3. TAX Withdrawal – Not compulsory, yet it is highly recommended from compliance point of view
  4. Maintenance duties for IT-related items such as staff PCs and servers

Large multi-national firms have experienced system challenges in common. As they grow and expand into new markets, their enterprise systems also grow big. Each market has cultural preferences, which reflects to system developments exclusively for them. It will be so difficult to upgrade the whole system once it would have been over-stretched.
We believe you need core & fringe 2-sphere design in system development. We can help to develop a fringe sphere for local market.

CONSULTING for INTERNATIONAL SERVICES

Language is always a big barrier in international businesses. Because of language and cultural differences, you need to hire expensive bilingual staffs. You might think of having a Japanese staff in home office who serves as a liaison arrangement. You might also think of utilizing international business agents with very expensive service fees. All of these initiatives are expensive and require time-consuming processes.


You now have a different option – We are just gaining international communication ability. We have got working resources containing past international business experiences such as former General Managers of multi-national corporations.

Trust who knows the market – And we are the ones who know it the best!

TYPICAL CHALLENGES in JAPAN

Recruitment

You won’t see ample candidates with MLM experiences. In many cases, US companies do not have any access to local agents like us, so they spend a lot to hire through multi-national recruiting firms. Their commission rate is very high.

Layoff

Once you have employed, it’s really difficult to layoff. The thought of lifetime employment is still strong in Japanese labor standard act. To proceed optimization, you must spend additional $ for an attractive severance package. This is the typical law-suit avoiding method.

Retention

You will face with staff retention problem. Current human resource is limited so that quality candidates won’t join in “unpopular” MLM environment. You would probably hire one from a dispatch company after interviewing 5 to 10 candidates. Once you will get a new staff, you will see 50% chance of survival over a year effort of training.

Rent

Office in Tokyo is expensive. Not just cost, but your challenge is going to be the landlord of the tenant you are looking for. Because of negative reputation regarding MLM business in Japan, it tends to be challenging to contract with the landlord who often shows negative response and avoids MLM business operators.
Example below is an office for annual sales of JPY 1 Trillion in middle-graded price range. With this cost, you can give your office great accessibility to public transportations and you can build up company branding image.

Office in Central Tokyo (Cost in USD)
Grade - Intermediate USD Sq.ft
Monthly Cost/Tsubo 207
Office Space 10,787 1,850
Walk-in Counter 3,112 534
Salon Space 8,713 1,494
Storage 3,112 534
Seminar Room 10,787 1,850
Monthly Rent 36,718 6,262
Annual Rent 440,612

SG&A

Compared with other Asian Markets, you may be surprised at much higher SG&A in Japan operation.
P&L below is based on a middle sized multi-national company annually generating 1 Trillion Yen (about USD 8.5 Million at Nov.19 2014 FX Rate) in Japan.

P&L USD % to N.S
Net Sales 8,539,000
COGs 1,537,020 18%
Distributor Incentives 3,842,550 45%
Operating Profit 3,159,430 37%
SG&A 2,143,388 25.1%
Contribution Margin 1,016,042 11.9%
SG&A_Item * We can less optimize USD
Labor* 14,487,400
Rent* 440,612 Central Tokyo, 6262 sq.ft.
Warehouse* 37,002 1.7% to Net Sales
Travel/Accommodation 8,539
Credit Card Fee 22,771 1.1% to Net Sales
Printing* 10,674
Events/Promotions 170,780 2.0% to Net Sales
Other Misc. 4,269 Depreciated Assets
SG&A Total 2,143,388 25.1%

Labor Cost

Table below shows Labor break-down. To run annual 1 Trillion Yen business, this would be the base line to secure reasonable Customer Service quality.

Labor_USD Base Salary Social
Felfare
Annualized Profit
Sharing
Total
General Manager 15,370 3,843 230,553 21,282 251,835
Finance Director 10,247 2,562 153,702 14,188 167,890
Sales Manager 6,831 1,708 102,468 9,459 111,927
Compliance Manager 6,404 1,601 96,064 8,867 104,931
Creative Specialist 4,440 1,110 66,604 6,148 72,752
Warehouse Supervisor 4,440 1,110 66,604 6,148 72,752
Technical Supervisor 4,269 1,067 64,042 5,912 69,954
IT Supervisor 4,440 1,110 66,604 6,148 72,752
Fin (A/P) 3,159 790 47,391 4,375 51,766
Fin (A/R) 2,903 726 43,549 4,020 47,569
Marketing Rep 2,989 747 44,830 4,138 48,968
Sales Rep 2,732 683 40,987 3,783 44,771
CS Leader 3,586 897 53,796 4,966 58,761
CS Leader 3,586 897 53,796 4,966 58,761
CS Rep 3,159 790 47,391 4,375 51,766
CS Rep 2,732 683 40,987 3,783 44,771
CS Rep (Dispatch) 3,245 38,938 38,938
CS Rep (Dispatch) 3,245 38,938 38,938
CS Rep (Dispatch) 3,245 38,938 38,938
Annualized Total Labor 1,448,740

WE CAN HELP YOU !

Visible Cost Benefit: Miyako Solutions may cover below tasks !

  • 1. Compliance Manager
    We take care Customer Service Center matter. This tends to be a large portion of compliance task. Estimated at 30% of less optimization.
  • 2. Creative Specialist & Marketing
    We can handle all printing materials and product related tasks.
  • 3. Warehouse Supervisor
    We can provide better deal regarding warehouse management through volume merit contract. Estimated at 30% of less optimization.
  • 4. IT Supervisor
    We can take care of IT-related tasks such as PC & Server maintenance.
Miyako Solutions Optimization Plan
Customer Service Fee 341,560 4% to Net.Sales
 With this cost, what you can remove
1. CS Leader(2) Reps(5) 330,873
2. Compliance Manager 31,479 30% of Compliance Manager
3. Creative Specialist 72,752
4. Marketing Rep 48,968
5. Warehouse Supervisor 21,826 30% of Warehouse Supervisor
6. IT Supervisor 72,752
7. Space 132,184 30% of Office Space
Total removable 710,834
COST LESS Optimized 17.2%

Invisible Cost

Above table just shows visible cost that directly affect your P&L. Please bear in mind that you also need to spend ample time and money on invisible matter. Supervisors need to sacrifice his / her precious time to train new work force. Also they need to pay a lot of effort to keep motivating their people. You will enjoy being free from these difficult tasks.

OUR HISTORY

Last year alone, we have supported over 50 companies. Their accumulated net sales have recorded over 100 Million US Dollars. We believe we are playing a crucial role in contribution of Japan’s Network Marketing Industry. It is our mission to bring the best services possible to Network Marketing Companies with the competitive pricing.

  • 2002

    Flex-I was founded on a vision of being the best consulting company Launched System Development & Outsourcing Services

  • 2004

    Tokyo Branch Opened
    Packaged software “Miyakomaru 2004™” released
    Kyoto Home Office moved to the current larger facility
    Opened Data Center

  • 2006

    Expansion of Customer Service Center

  • 2007

    “Miyakomaru 2007™” released

  • 2008

    Certified by Japan Information Processing Development Center (JIPDEC)
    “Miyakomaru 2007™ SE” released

  • 2009

    Miyako Solutions was established as a subsidiary of Flex-I
    MLM business functions transferred from Flex-I to Miyako Solutions

  • 2011

    “Miyakomaru™ APP PACKAGE for iPhone” released

  • 2013

    “Miyakomaru 3.0™” released

  • 2014

    Tokyo Branch moved due to business expansion

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