If you can tarnish a mirror, chances are you’ve been approached by a well-meaning friend or relative who wanted you to get into their network marketing business. Touting too-good-to-be-true residual income and commission checks, their frenzied fervor likely made you feign injury to escape and duck for cover the next time you saw them.
The truth is that the vast majority (some say as high as 97%) of network marketers quit before their business is viable. In addition to a slow ramp-up phase, there’s that seedy reputation to contend with: pyramid and Ponzi schemes, distant cousins who invite you to dinner only to try to sell you on their cleaning supply business. “Reminds me of an Amway salesperson” is almost never meant as a compliment.
network marketing now
That was then, this is now. Network marketing, also known as direct selling or network marketing, is coming out of the shadows and becoming widely accepted as a viable and profitable business model.
Because? For a number of reasons. In this economy, it makes sense to run a business that you can’t get fired from. Residual income is a very good thing. And just as important, network marketing is the great equalizer.
the great equalizer
Where else can you become a “franchise” owner for a few hundred dollars with the potential for significant residual income within 3-5 years? Where else does education, social status, ethnicity, or gender make a difference to your prospects, your chances, your potential income?
Perhaps that’s why Donald Trump and Robert Kyosaki endorsed network marketing in their book Why We Want You to Be Rich, claiming that it gives the average person a chance to “play with the big boys.”
The (Slow) Road to Riches
In his book, beach money, Author Jordan Adler Shares His Network Marketing Story: 11 MLM Businesses That Failed Before Strikes Gold With Number 12. “Gold” is relative if you look at his commissions for the first six months: Less than $100 per month. Most people give up at this point. Either they have other jobs and are trying to do network marketing on the side, and their lousy returns and other interests get in the way, or they are trying to keep up with their network marketing and lose patience.
Months 7-12 hours averaged $800 per month. It’s still not enough to pay the bills, and the few people still holding on probably would have taken this as a sign of things to come and jumped ship. A whole year in business and only making $800 a month? In her sophomore year she averaged $2,113. Two years in a business and making a little over $25,000 a year. Again, most people would be disappointed by those results, even if this was in the early 1990s.
Fast forward a year. Your monthly income? $34,000. Yes, monthly. What happened? A little thing called impulse. Once the snowball starts rolling, it gains speed and circumference. After his third year in business, at a point where 97% (or more) of the world would have left, Adler was racking up phenomenal raises every month, from 5 to 60%. So, in less than four years, he was earning an enviable residual income salary for most. Yes, he was still working to build the business, but he didn’t have to work too hard, he reports. Those he brought took care of business for him. Now it was his job to support them, nurture them, and set them free to earn even more money.
Fast-forward again to today: $100,000 or more per month is not unusual for Adler, and when he “only” makes $50,000 per month, he checks to see what went wrong. Is this an isolated case? No. As Trump and Kyosaki remind us in Why We Want to Make You Rich, network marketing has produced more millionaires than any other industry. Though rare, Amway founders Rich Devos and Jay Van Andel, for example, have a combined net worth of $6 billion. It’s good to be king.
Yes, there is opportunity, and it does help if you start when the company is young. The further up the “up line” you are, the better your chances of making a fortune before the market saturates.
The pyramid is not a four letter word
But isn’t MLM a pyramid scheme? Scheme no, pyramid yes. The more people you have below you in the business, the more money you will make, generally speaking. It makes a difference if and how they run the business. But isn’t a corporation built the same way? The head of the corporation makes the most money, and each level below has diminishing returns. Network marketing puts you in charge of your own business: you can create your own empire, even if you are a few levels above you.
Not all network marketing opportunities are the same
But before you jump into the next network marketing opportunity that comes your way (and it will), here are some tips to keep in mind when evaluating the company.
1) It should be low start-up cost and low maintenance costs
2) It must be a fairly young company, but not too young. You should have some legacies to lean on and have an oversight committee. If you’re not a young company, a long-standing company that doesn’t have a saturated market is fine too.
3) You must provide a product or service that you both understand and believe in, otherwise how will you sell it?
4) You must have integrity. This starts from the top down. Find out who the owners are and where they were before launching the business.
5) You must have little or no competition. .It must be a unique product or service.
6) You shouldn’t have to buy and stock inventory (My pet peeve; some people don’t care about this.)
I have two friends in network marketing businesses. Both are doing well, in the $1000+/mo range. I also know, through an acquaintance, a woman who sells a nutritional supplement and makes a confirmed $10,000 per month.
I buy these products, I love these products, I believe in them, and yet I would not want to represent them. This brings me to the next requirement:
7) You must feel passionate about the product you represent
Chances are, you’ll spend months, even years, making very little money in network marketing, so you can’t participate just for the potential income. You have to believe in the product with such conviction that you would represent it even if (read: when) you don’t get paid to do so.