Network Marketing; Flexibility and Choices

Network marketing is a distribution chain of independent sales representative. Sometimes referred to as consumer-direct marketing, direct sales or multi-level marketing (MLM). The term “affiliate marketing” is one originally referring to online cross-selling, yet it is also applied as a new buzz term for network marketing. For those who wish to become an entrepreneur but don't know where to begin, an arrangement like this can be very attractive. Often, there is talk of making a lot of money in a short amount of time. Now, what's that old adage about if it seems too good?  

Some of these companies are good and some are just filled with MLM junkies who are on to the next “opportunity” when the previous one has fizzled out. Now, so much of it is done online and the internet has really changed the model of how companies like Amway, Shaklee, Avon, Nu Skin and Herbalife have to market themselves. Case in point, a lot of Herbalife distributors are now establishing brick and mortar smoothie shops. That’s not bad, but most in the “network” were originally sold on not having an overhead. A storefront, utilities and employees are overhead.

It's PROBABLY not a cult, but you have to be aware of the lingo and rhetoric. You will hear things like, "down-line" which is the group of distributors you have recruited to your "organization" or "team".  Obviously, the one who recruits you is your "up-line". They love slang and initials. Point value (PV) is sometimes used instead of referring to money, and every distribution level will be named after a gemstone or mythical creature. It's a way of keeping score without realizing how little money one may be actually making. 

Should you attend a meeting, the facilitator up front will be quick to tell you how much money he made. But if you ask someone on the back row who has been attending for a year or more, they will be as tight as a clam. You will also hear about how easy the "plan" is. Well it is easy, once you have put in the blood, sweat and tears. But who knows for how long that will take?

Over my life, I have been a distributor for a handful of these. Personally, I believe the best ones are those which provide a service rather than a line of products. It's much more straight-forward. Professional services also tend to attract a better class of people. And that is KEY. You will be recruiting... a lot! No one ever became rich from simply being a distributor. You have to have a big down-line. 

Is network marketing a pyramid? There are stipulations within Federal law and possibly even State laws as to what constitutes a pyramid scheme. These are based on what the product or service is and organizational structure such as how many levels of commission there are. If a distributor joins the company, he or she CANNOT be forced to purchase products or use the service to join. This is a serious no-no as well as a sign it's a scam. Though, they may charge a nominal administrative fee of twenty or thirty bucks to set you up as a distributor.

A big factor as to legality, is whether there is even a product for sale or not. I remember in the late eighties, there was something called the "Airplane Game". People would pay to "play the game" but there was no product. As individuals paid a thousand bucks or more to join, they would move up from passenger the flight attendant to captain, based on how many other passengers they sold "tickets" to. It was akin to a Ponzi scheme. This was a clear pyramid and its originators actually went to jail. 

I may sound a bit cynical of this "referral marketing" because so many of them are unfortunately fly-by-night. But I am actually not opposed to the marketing model. Not at all! In the right setting and with the right service or product to offer and a good leadership team, one can start a very nice business with little investment. Of course, where there is little upfront money, there must be a lot of effort applied to grow the business. But, that shouldn't intimidate a budding entrepreneur! 

Here are a few things to avoid;

 - Any company that has broadened its reach from the original core product. They have lost their focus, mostly due to competition or market boredom. But more crap to sell is nothing more than just more crap! Look for something that is unique or exclusive.

 - Companies that can restructure your commission rate without your consent. They will do this.

 - Avoid organizations where the MAIN thing is recruitment. That’s not a business, it’s a networking association.You can find this out by visiting the "sales" meetings and timing how much the person at the front of the room talks about bringing people to next weeks meeting than the products themselves.

 - You can't swing a dead cat without hitting a vitamin or "supplements" company these days. They are cheap to make so they can have a huge markup. The quality of most of these are not any better than what anyone would buy off the shelf. Though, you will hear customer testimonials rave about the product simply because they never took vitamins before! I am guessing almost half of these companies are in the herb, oil or vitamins business. If supplements are the mainstay of the company, run!  

 - Also run away from companies that are “breakaways” from other marketing groups and are replicating their predecessors. This happens many times because someone with a large down-line has figured out how cheap those vitamins are and wants a bigger piece of the pie. The problem is, all those people who were fickle enough to leave the original company, will be fickle and leave the new one as well. 

 - If you hear "We're going international", it's because the product is saturated domestically.

 - If it's less than two years old, it's untested and the leadership has yet to prove itself. If it's over ten years, you have MISSED the "ground floor" opportunity.

But there are upsides as well. If you have never been exposed to sales or business in general, this is a wonderful environment to begin! This can be a place to encounter different marketing ideas and sales tactics. You will learn quick whether a prospective customer is interested in what you have to offer. Business is about controlling your resources and the most important one is time. You will learn to prioritize your efforts in a way that may not be required in a typical 9 to 5 job. 

In fact, it is something that allows for flexibility. More and more people have "side hustles" these day. This can be a perfect weekend gig until the business takes off. Though, at some point, you may want it to be large enough for you to leave your steady employment. At least, that is the dream of owning your own business. But some speak of just having some extra pocket change or making the car payment each month. Again, it's flexibility.

Even if you don't make your first million through network marketing, you will gain a lot of sales experience that may come in handy in other endeavors. Though, there is encouragement from your up-line and other distributors, you will learn to test your mettle by pushing yourself out of the comfort zone. THIS is what all entrepreneurs learn in order to be successful. 

Generally, the other people involved are very positive. A rookie business owner may be shown new, healthy ways of thinking through shared books like Think and Grow Rich, or How to Win Friends and Influence People. Sadly, not everyone was exposed to having dreams and aspirations or the art of being positive while growing up. For those raised in a negative or even abusive environment, this can be very cathartic and freeing. Friendships may be formed that will last long after the business. 

Millionaires have been made and operate ethically throughout the country. I've watched people do it with my own eyes. It is up to YOU to discover the right path (and group of people) to take you where you want to go. I have also seen dozens if not hundreds move on to do something greater, using the knowledge they gained from their networking venture. Like anything, you only get out of it what you put in.