If your network marketing company doesn't have a future, does your business?
By Tim Hicks
I've been involved in Network Marketing (MLM) for over 22 years.
In that time, I have seen a lot of companies come and go. Most companies come in with great excitement and fanfare and quietly disappear a few years later leaving behind a trail of broken promises and broken dreams.
That leads me to ask this question, if the company you promote fails, what does that do to your business? The answer is simple, it destroys your business. With that in mind, what can you do to protect yourself from this catastrophe? Well, here are my recommendations.
1. Choose a stable company, one that's been around for a while.
I know the temptation is there to jump on a hot new company that has just popped up. The logic is that older companies have some how "saturated" the market and that a new company is the best bet. In most cases, this proves to be pure folly.
In the first place, the saturation myth assumes that established companies have already cornered a huge share of the marketplace and that the size of the marketplace is static. There has never been a direct sales or MLM company that has gained a majority of the market share. Most do well to have 1-2% market penetration.
That leaves a lot of room for growth. Besides, the marketplace is always changing. Everyday, new people are born.
Secondly, it could be risky to put all your trust in a new company that has never been tested. How do you know that the company you're doing business with will be able to handle the trouble and "down times" that eventually all companies face? If they fail, your business fails and you have to start all over.
It's just that simple. You want a company that has weathered the storm and come through strong.
Sometimes, you will hear a prospective sponsor tell you that their company is "just about to hit momentum" and that you need to get in NOW because in a few months, it will be too late. Let me ask you this, if people who join a few months from now will be too late to make any serious money, who are you going to sponsor?
If a few months from now will be too late, what will be the reason for new people to join then? If no new people join, what does this mean for your business? Take my advice, when someone tells you that it will be to late to join a few months from now, RUN AWAY as fast as you can. That is a tell tale sign that you are being pitched a grade "A" scam.
Along the lines of choosing a stable company, you want to check out the company's management team and financial backing. Do the executives have the experience to grow the company? Does the company have the financial resources to handle the growth that the future may hold. You don't want to deal with a new company that is under funded and that collapses under it's own weight just when your business is booming.
2. Choose a company with a product line that real people actually use. There are a lot of companies out there who market fantastic sounding products that promise to do everything from make hair grow to cure Epileptic dogs, but are these claims believable? Probably not. Even if the product is super great, if it's not one that people see as a necessity, they won't continue to order, especially during periods when money gets a little tight. What happens when orders slow down? Your income does too. Don't buy into the hype. Choose a company with real products.
You want products that people buy, use, use up and reorder.
That's how you build stability in your business.
By the same token, choose a company whose products you love.
Only promote a product line that you yourself would buy, even if there were no monetary gain to be had. If you cannot honestly say that you would buy a company's products without the compensation plan, you're probably not looking at the right company.
3. Choose a company that promotes retailing of their product line to people outside of the compensation plan. This is closely related to my final thought on point number two. I know that the popular thing is to say "No selling required" or to promote a business as a "wholesale buying club." Let me tell you one thing straight. NO COMPANY has ever had long term success without retailing products to the public.
If your company doesn't promote retailing, does it really have a product that the general public would be interested in and that they would buy? If not, this is not a company you want to associate with.
Besides, that is one sign that regulators look at when deciding if an business is a legitimate network marketing opportunity or an illegal pyramid scheme. You don't want to be on the wrong side of that debate.
4. Choose a company with positive brand name recognition. This is a biggie and it's one prime reason why you should choose an established company. Many businesses spend millions of dollars each year to build a positive image with the public. When you join an unknown company, it's up to YOU, the distributor, to build that image.
When you join an established company, you benefit from the goodwill and reputation that was built by those who came before
you. If you choose the right company, you will inherit a level
of trust that your prospects already associate with that company.
That puts you miles ahead in the sponsoring arena. You don't have to work as hard to build credibility. A lot of your credibility has already been built for you.
5. Choose a company with a strong track record of success.
Sheer longevity isn't enough. You want a company that has produced successful business owners over the years. Do your research. Will the company tell you what the average leader makes? If not, there's a good change that the average leader isn't making any money. When people aren't making any money, they quit. When enough people quit, the business fails. It's not rocket science.
Am I saying that you should never consider promoting a new company? Not at all. If you have the time, resources and adventurous spirit necessary to take the risk, go for it. After all, you may find the next long-term opportunity. However, if you're like most of us, and want to find a company that you can feel confident about putting your name with, you'll probably do much better to stick with an established and proven-reliable firm.
About the Author:
Tim Hicks, DD has been helping people to start REAL home-based businesses and avoid scams for over 22 years.