What do you want from a network marketing company?
If you are like most people looking at home based business opportunities, you want an opportunity which offers you a really good chance at success, right?
Please put everything you have ever heard or read aside for a minute and consider the following 3 dirty little secret about MLM you have never heard or read:
Dirty Little Secret About MLM # 1:
This secret is about products and how long any network marketing company may last.
A company which has products that are solid performers with a good sales history, but that are not cutting edge can be good – you can be sure that you will be able to sell some of the products.
Conversely, you may find it harder to sell products which are widely sold and consumed by many different companies – and for the obvious reason – competition.
A new “buzz” product – one people can get excited about can fly out of your hands – at least in the beginning. It is possible that a new product will sell fast for a while – only to fade if it becomes apparent it isn’t performing as advertised. Nothing can destroy your business faster.
What can you do?
If you can find a company with a product that is relatively unknown in the market, but that is quickly growing in popularity – and that product has already caused many people to talk about it and write about it, you may have found a product “rave wave.”
A past example of “rave wave” would be liquid minerals during the 1990s.
My wife and I joined a company in 1996 which was relatively new and had a new product. After using the product with our family we quickly experienced real results. Nothing is better.
Once we had results with the product, we were easily able to find others to share the good news with – and that resulted in sponsoring 300 people in just over one year – and our group grew to 10,000 over the next few years.
Yes, we had tried to build a business with another MLM company that did not have a new and exciting product before we marketed the liquid minerals. We worked super hard with the first company for a year. Our income was $1,500 after 12 months. It was too slow and not much fun.
Should sharing a product be fun?
If the product is exciting and gets results, sharing it with others is exciting and fun. If the product (no matter how good it is) is not new and doesn’t get relatively exciting results, your business will not be fun – it will be WORK!
The end result of our second network marketing or MLM experience was earning over $1 million in 4.5 years – even though we stopped actively “working the business” after just 14 months.
What did we do?
Our children were young. We home schooled them. We did 4H. We took them on a 5 month vacation. We felt almost like “aliens” walking around in a society that was “living for the weekend” because we didn’t have to work…
Did the product sell for a long time?
We still use that product today, 17 years later… and we still get results with it. The opportunity to sell the product through network marketing faded because eventually, the product was everywhere. The company no longer exists. We got our last check a few months ago – it was $89. Our peak check during the third year was $24,561.
What is the dirty little secret here?
Many network marketing companies succeed fast because of a hot product, but don’t last because they fail to find new and exciting products as each product enters the mainstream of the market place and competition rises.
Does that mean network marketing is a bad idea for a home based business?
It is a bad idea if you expect a company to provide you an above average income for life. Yes, there are a few exceptions in the industry. Were we dissapointed when the excitement stopped and our group faded away? Yes, of course we were. We decided we would never “do” MLM again. That was 17 years ago.
In the time since, we built a large real estate company which peaked at 148 agents.
What happened? The boom that collapsed in 2008 put an end to our office. Suddenly, no one was buying real estate, but we still had to come up with $30,000 a month to pay the bills of the business. We “fed” the business hoping for the market to change – it didn’t change!
Hindsight is 20 / 20.
What did we learn? We learned that conventional business contains more risk and more down side than network marketing.
If you join a company that eventually fades away, you don’t have to spend a ton of money desperately pushing on a string. And of course, you don’t need much money to start a network marketing downline in the beginning either.
Sure, we made a lot of money with the real estate office – and lost a lot of money too! When our MLM business faded away, we still made money until the last check.
Yes, we still sell real estate – but the thrill has been gone for a long time… and so, we have reexamined our years in network marketing – they were the best years of our lives.
What about the people we got involved in MLM? Yes, we made relatively good money, but what about our downline?
You (and we) cannot control everything.
What about all the agents we had trained who could no longer make a living selling real estate? They found other work. Were they better off for having learned to sell real estate? We think so. Many are still selling real estate. Most are grateful for the education and for the relatively easy commissions they earned during the boom. They know the crash wasn’t our fault.
As for our old MLM downline – what happened to them?
80% of network marketing distributors never sponsor more than 2 people and they never get a check. However, our MLM group was the exception to that rule. I’ll tell you why in “Dirty little secret about MLM # 2.”
Dirty little secret about MLM # 2:
There is ONE feature about the compensation plan that matters above all else.
The network marketing industry promotes infinity pay features, cars, sign up bonuses and front load packages on which you’ll be paid big commissions. Forget all that stuff and forget the company you are looking at if it doesn’t offer the following features.
Why?
It is because the following features build stability in your group and pave the way for relatively easy (and fun) growth of your group.
Can a product user join for free?
If not, run! MLM “gurus” will tell you to promote “the opportunity” (the chance to make big money from home). That is putting the cart in front of the horse! The driving factor in any MLM is the PRODUCT – and the VAST majority of people who join you will (initially) be primarily (if not totally) interested in getting and using the product.
Are the products competitively priced?
As you can see from the paragraph above, if the price of the products is “out of school” you will be out of luck because no one will continue to buy a product that has a crazily high price tag.
Assuming the products are fairly priced and they work, you still need insurance against eventual competition.
That “insurance” is the mouth of your product using customers. Many of your product users will tell you, “I don’t want to do the business.” However, people love to tell others about the good things they find. Once they have a friend wanting the product, they WILL (in many cases) contact you to get help signing up their friend.
If the company you are looking at makes it easy for product users to sign up a friend – and the company will pay them for that, you will be building on a solid foundation.
If the company insists that product users become a representative to get paid, run! However, if the company has a system that allows a product user to overcome their monthly product cost by signing up a few friends – that is the basis of a winning combination.
Why? When a product user over comes the monthly cost of the product they are using, they are “bullet proof” because all competition is eliminated – they won’t ever find the product somewhere else for free… and some will be converted to business builders at the micro level and a few at the mega level.
The logic goes like this:
Product user: “If I can get my product for free by signing up a few product user friends, what could I do if I became a distributor and started treating this like a business?”
We had many people making $300, $600, $1,500 $6,000 and more a month who started out as pure product users. The key is to help product users like they matter (because they matter MOST).
The only thing better is if a product user gets a check (no matter how small) after signing up just one friend who orders – again, this is because 80% of networkers never ever get any check. Just getting any check (or electronic payment) is shocking for most people.
How did we sponsor 300 people and build a stable group?
In our former MLM experience, it was the above features which allowed us to sponsor 300 who became 10,000 people – the vast majority being product users or small builders. Out of 300 people sponsored, only a few were hard charging heavy hitters.
Dirty little secret about MLM # 3:
As you can see, the vast majority of our former group were product users – many who became micro builders, typically making $300 a month.
What is the 3rd dirty secret about this?
The network marketing industry guides you to go after existing network marketers. The problem is that many existing network marketers are victims of the “next shiny object” syndrome – they fly like a parrot to the next shiny bobble in networking.
Product users come from the general public.
They are NOT looking for a network marketing gig! They don’t know what you are talking about. On the other hand, 7 out of 10 people on the street (and online) want to know about a hot new product. We (you and I – the general public) are always interested in hot new products, aren’t we? Were you interested when the first iPhone came out? We were.
So it follows – building your network marketing business by gathering product users is the way to go. MLMers are NOT doing that – they take what they THINK is “the easy road” – they think they’ll sponsor “seasoned network marketers.”
It is a huge and often repeated mistake. Take the path of sponsoring network marketers and you’ll be in for a lot of rejection and you’ll have a hard time building stability.
Conclusions:
Life is about taking calculated risks. Business is about taking calculated risks without risking a lot of money to start. Don’t spend any money for a while on any company you join. Join for free and check it out. Ask people you know for their opinion. If everything feels good, take the next step and order the product. If you get results, consider “doing the business.”
The redeeming factor about network marketing is exactly that – no to low start up cost. Don’t bet the house. There is not another business model on the planet that offers so much upside for so low an investment – and offers very little down side risk.
Again, we were MAD that our network marketing company because it didn’t last – but neither did our real estate office last. The BIG difference? We KNOW the amount of money we earned net from MLM.
We also knew the pain and financial loss from conventional business when the real estate market shifted – it was not pretty. AND we didn’t get 3 years to play and do anything we wanted to do while we operated a conventional business!
What should you do next?