Network Marketing (Done Right!)
Network marketing (also known as M.L.M. or Multi-Level Marketing) is a proven business model that harnesses the power of person-to-person marketing and sales. It’s also one of the business models I personally stand behind because of the unlimited earning potential and leverage it provides.
PROS AND CONS OF NETWORK MARKETING
PROS
- Low to Moderate Start-Up Cost
- A Sponsor to Support You
- Personal Training & Marketing System for Success
- Work Your Own Hours from Home
- Big Profits as Your Business Grows
CONS
- Competition with Other Distributors (lucky for you, most are doing things ALL wrong!)
- Marketing Learning Curve
- Network Marketing Companies Often Teach You the Wrong Way to Market YOUR Business (which is why you need a good sponsor who knows what to do… I’ve got you!)
- Sponsors Often Disappear Once You Join (NOTE: I won’t disappear on you)
Here’s how network marketing works…
Instead of relying on mass advertising or conventional retail strategies to get people to buy their products or services, network marketing companies believe in the power of people like you and me (a.k.a distributors or reps) to market and sell their products. And for doing so, the company pays the distributor a commission when a sale is made.
Where network marketing shines over affiliate marketing is with:
A) Highly leverage lucrative compensation plan that is virtually limitless
B) Monthly auto-ship product purchases create monthly cash flow for you
Network marketing allows you to recruit a team of other distributors below you to sell the products. And when your team makes sales, you earn commissions from those sales too… since YOU are the person who brought them in (also known as their sponsor). Those people are also allowed to recruit people into their team, so you get paid on their product sales. And it goes on and on down the line! (Which is why your team is referred to as your “downline.”) What I just described is LEVERAGE.
YES, you can earn real residual income that comes to you month after month like clockwork. But before signing up to be a distributor for a direct sales company, here are 8 factors you should consider.
Number # 1: Products/Services Must Offer Competitive Value
Find a reputable company that sells products and services that can compete in the market. The problem with many network marketing companies is that they offer products that can’t compete on price against companies like Amazon. So the only thing that company can offer is the “switch pitch.” This is where the consultant will convince you to switch your buying habits and pay more for a product even though you can find a comparable product at a lower price virtually anywhere else.
Number #2: Products/Services Must Be Marketable Separate from the Comp Plan
Make sure the company offers products that can compete separately and apart from the compensation plan. Too many direct sales companies have gotten in trouble with regulators because the distribution of customers to reps wasn’t high enough. A thriving direct sales company will be comprised primarily of paying customers. Customers who continue to purchase your products and services are what you need to build a long-term sustainable business.
Number #3: The Company Must Have Leaders with Both Integrity and a Track Record of Success
John Maxwell once said, “Everything rises and falls on leadership.” That is so true. Integrity matters. Having a track record of success matters. When network marketing companies fail because of incompetent or immoral leadership, it puts a black eye on the entire industry. Before jumping into a business venture, make sure you check out the leadership behind the company.
Number # 4: The Compensation Plan Must Incentivize Business Building Behavior
A volume-based unilevel compensation plan is, in my opinion, the fairest and potentially most lucrative. You can make money with the binary or the matrix, but remember that these comp plans are rigged to ensure the distributor doesn’t earn money from his/her most extensive leg.
Number #5: The Company Must Provide Products to Sell
I used to be a basher of potions and lotions, but I have learned that potions and lotions can earn you a nice living. In my previous company, the only way I could receive a commission was to sell a membership. That’s it. Throughout the history of network marketing, the biggest earners had a large customer base who purchased products. Rember this! “Product on hand is cash on demand.”
Number #6: Formulation Is the Optimal Phase of Growth
If you are like most people, you are probably wishing you had invested in Apple, Amazon, or Netflix before those companies exploded. Hindsight is always 20/20. In network marketing, it is still possible to find companies in the formulation stage. I was once with a company that went from formulation to momentum very quickly. I watched it happen. I was at the event that had 3000 people, and I watched it explode to 15,000 within two years. The formulation stage is uncertain, but if you get in with the right company with the right products and the right leaders, you can be part of the tidal wave that is momentum.
Number #7: The Products/Services Must Provide Value and Help People Solve Real-Life Problems
Before joining a network marketing company, make sure that the company provides products and services that benefit you. It’s hard to sell someone a product that you don’t use yourself. If you see that value in your products, that enthusiasm will be easily observed by prospects.
Number #8: The Business Model Must Be Duplicatable
You can’t build a large team if you don’t have a simple, duplicatable system. Thriving companies invest in systems and training to ensure reps have the tools, resources, and skills to succeed.
The Bottom Line
Network marketing has made more millionaires than any other industry. You won’t achieve overnight success in direct sales. However, with perseverance, some right business strategies, and getting connected to the right company, there is a high chance that you’ll succeed as a network marketer.
Did you get value from this post? Let me know in the comments below if you have any additional tips you would like to share.
You rock,
Bill
205-317-1031
P.S. Gain access to my free guide on how you can create 50 leads per day in your network marketing business. Click here!
