New to network marketing? Interested in the potential of an MLM business but not really sure what to look for?
While it is easy to be lured by the fantastic income claims which one will often hear when being presented with a new business opportunity, there are a lot of network marketing companies out there and a lot of products being sold by those companies. Since I began in network marketing back in 1998 I have made some observations about mistakes which are commonly made by people new to this industry. In particular I am talking about mistakes made in selecting which company one is going to join. Keep in mind that the decision about “which company?” is incredibly important not only for your financial future and security but for that of your friends and family, assuming that most of you will first begin recruiting in your warm market of friends and family. The last thing you want to do is bring your loved ones into an opportunity only to find out later–after investing much money, time and effort–that it was bad choice of company in the first place.
Without my endorsing any one company, here are some things that you may want to look for when making that decision:
- Is there an actual product that can be purchased by people who are not distributors? If the only thing being sold is the business opportunity and there are no tangible products being sold you are going to find yourself looking for another company in the not-to-distant future. Aside from the fact that it’s probably an illegal operation, it has been proven that these types of companies do not last long. There is no tangible foundation upon which to build a “business”. Now, there is such a thing as a “membership”-type product which is a situation where the “members” buy in to get their “membership” and because they are member they now can get a particular advantage on some other product. Like, when you buy a Sam’s club membership and now you do buy lots of products which are discounted because of your membership. This membership-type product can definitely be considered a real product and then of course, the members have other products that they purchase. This is totally fine. What I am talking about avoiding is the utter lack of valuable product of any kind.
- Is the product of value? In other words is the price of the product fair and equitable for the purchaser of the product? Are you selling 6 rolls of bathroom tissue for $12.00? That would be an example of poor value. A 6-roll package of bath tissue for $0.99 would be good value, provided of course the tissue itself is well-made.
- Is it a high-tech product? Technology changes fast. Back in 2000 I was doing quite well network marketing a high-tech product and then the manufacturer just stopped making it. I was totally dependent upon the manufacturer for my livelihood. But the technology was changing fast and it just became non-profitable for them, though it still was for me. Hard to market what you can’t get a supply of. So I’d be very careful with high-tech products.
- Is the company a “pre-launch”? I would tend to stay away from these as there is absolutely no track record of reliability. Will everyone get paid? Will the products be delivered and on time? Is there good service for the customers, etc.? These are all impossible to answer with a start-up, though I realized many MLMers actively seek these out for the “ground-floor” opportunity. I am not sold on that concept. There are a lot of people in the world, more than enough to provide for a booming business without having to risk reputation, wasted time, and effort gambling with a pre-launch, in my opinion.
- Is the product some “new-fangled”, overly unique widget that not only do you have to teach people all about what it is, but you have to convince them that they need it? Many networking companies market products like this under the concept of “no competition”. Personally, I would steer away from these as well. I’d recommend looking for a company with products which are things that people are already using, especially if you can provide those products for lower prices and better quality. There is a reason Amway has been selling soap, toothpaste, laundry detergent and every other household item you can imagine for years and years and years, and is still doing billions. I’m neither endorsing nor putting down Amway here. It is just an example of a company providing products that people are already using. You don’t have to convince them to use the product, you just have to get it to them. I am a big proponent of this “already using it concept”. There is a travel MLM out there called TVI Express which does well with this idea in that people are already taking vacations every year and TVI Express can get them the same travel arrangements far cheaper and more efficiently.
- What sort of presence does the company have? When you go to their website does it look cheap and unprofessional, like something your 10 year-old could design? Is there a way to actually communicate efficiently with the administrative offices for the company? If the site looks like crap and you can’t locate a phone number or email address to save your life, all you can find is a mechanism to “Submit a help ticket here.”, that would be a definite bad sign. It doesn’t take much money at all to hire someone to design a very professional and functional website for a business so the quality of the site can be a good indicator of the financial strength and/or intelligence of the group calling themselves by that company name.
- The other item of importance is the commission structure. How much do I have to sell and how many people do I really have to sponsor before I can make a legitimate full-time income? Many MLM companies are promoted based on the idea of residual income and many people work for years and years to create that residual but nearly starve to death in the process. I’d look for a structure that would provide immediate income as well as long-term residual. Do I actually know several people personally who are legitimately making such and such income and can they show me evidence of this? If all you can find are stories about Big Joe Soandso, who lives off in some far land and makes a zillion dollars with it, but no one else you actually know seems to be making much, I’d look elsewhere.
To your success,
-Alan
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Absolutely fantastic post. You hit the nail right on the with this post. I see too many people come into this industry think its going to happen overnight. Its systemic in the approach if they really think about it. They must grow themselves, discover the solutions to their problems and in their will be able to solve the problems of others. Only through dedicating their time to learn through the various mediums you noted above will they gain this knowledge.
Thanks Marcel! I will be over soon to take a look. – Alan
Howdy,
After reading your article about MLM I should like to bring under your attention that I as a trainer, coach and speaker for MLM groups I also have a blog where I give some general information about how to work in the MLM world.
Have a look yourself and let me know what you think. I am open for any co-operation.
Kindest regards,
To your success
Marcel Verdoner