In my previous post Legitimate Business or Illegal Pyramid?, I talked about how to tell the difference between a legitimate network marketing company and an illegal pyramid. In this article I will discuss criteria for a company that will offer you the greatest chance for success.
1. Has the company been around for at least 5 years?
If you want the efforts you put in today to pay off for many years in the future, choose a company that has proven that it will be around for the long term. 90% of all network marketing companies fail within the first 2 years of business. There are a lot of start up network marketing companies out there, it may be enticing to get in on the “ground floor” but the truth is, you should be able to do well in any network marketing company no matter when you come in, so pick a company that is in it for the long haul, with a proven track record. If the company has been around for a while, there’s a good chance the company is not an illegal pyramid, and will also not go out of business.
2. Is the company well capitalized?
In other words, does it have the cash that it will need to grow, to maintain a solid infrastructure, to attract talented management, to keep pace with technology? Publicly traded companies are ideal since the SEC requires publicly traded companies to disclose their financial condition in detail every 90 days. Private companies don’t have to disclose this information, so you would be taking a risk by joining a private company.
3. Does the company offer products or services that are unique?
There are countless network marketing companies that are selling some sort of nutrition product. I don’t blame them either, there are 78 million baby boomers, most of them are looking to improve their health and financial freedom. But the truth is, not only are there a plethora of network marketing companies hocking every potion and pill imaginable, there are also countless traditional companies running massive ad campaigns for their product. It’s very difficult to compete with so many “big guns”, so be sure to choose a company that has unique products and services, not found anywhere else, and are also something that is in high demand, or at the very least, the potential to create the demand exists within the market.
4. Is there a genuine need for the product or service?
You've probably heard horror stories about people ending up with a garage full of expensive products - the reason that happens is because the business opportunity makes the overpriced product more attractive. The distributor might think, yeah I’ll pay an extra $20 for this, because in two months I’ll be making an extra $3000. Of course, that’s usually not the case. Your product or service must fill a real need at a fair price, and there should be a large untapped market for it. To sum this up, the product or service must provide high value to the CUSTOMER, making the transaction a win/win situation.
5. Is the product or service trendy or a fad?
You really can’t expect to build a long term business on a product or service that is current fad. When I was in grade school everyone was playing with these things called pogs. You if you’re older or younger than me, you’ve probably never heard of them, but they were extremely popular when I was a kid and now long forgotten. You should avoid a company that is selling some sort of fad; these things fade away, leaving you starting from square one.
6. Can you generate immediate income?
But more importantly, how much immediate income can you generate? If you’re making 15% commission on the sale of a $60 product, that’s $9. Some companies offer advance commissions on sales with the presumption that your new customer will continue to buy the product. So if you’ve made a $60 sale, and you get an advance for the whole year, you’ve just made $108 dollars. I personally prefer this method of compensation, you do risk getting charge backs if you’re customer stops ordering, but it puts more immediate cash in your pocket and motivates you to continue to have a relationship with that customer.
7. Does the marketing system take full advantage of technology?
Not everyone is a sales type, but anybody can plug into a system and tools that do the selling and sorting for you. Most network marketing companies do not offer this type of high tech system. Their “system” consists of making a list of friends and family, calling them, and after you’ve exhausted that list, give tools to anyone and everyone you come across and try and invite them to meetings. This can be a painful process for most people, rejection is something most people are not prepared to deal with. Luckily, there are a number of generic, turn-key systems on the Internet. I believe my system is the best, has all the Internet marketing training you will need, weekly training calls with experts and top earners, a community forum for questions, and uses a funded proposal system to monetize the lead generation process. The best thing about it is that you can take try my system for two weeks for only $1. For more information click here or check out my other post An In-depth Look at Some Popular Funded Proposal Systems or if you don't know what a funded proposal system is, check out my other post The Funded Proposal System Explained
8. Is the person who is introducing you to the opportunity dedicated to your success?
If they are, the company is strong, and the product or service is a winner, (and, of course, you're willing to learn) you will succeed. There's a big difference between a "sponsor" and a "recruiter." A sponsor coaches, motivates and trains and a recruiter just signs people up and in most cases, abandons them.
9. Is there a way to build your business part-time without losing your full time income?
The company must have automated systems that can do the heavy lifting (lead generation and sorting of said leads) for you so that you can use your time efficiently. If you’re interested in a generic, self-branded system for your network marketing business, visit my website.
10. What is the customer to business owner ratio?
This one is especially important when considering nutritional product companies, but also applies to other companies as well. Ideally, you want considerably more customers than business builders. If the company's revenue comes entirely from it's associates, this is a red flag that the product is most likely not that great, and is only attractive because it has a business opportunity attached to it. Stay away from companies like these, there are better companies out there that have loads of happy customers that are perfectly happy not promoting the products.
11. Will you have fun?
Everyone has a need for excitement and fulfillment in life. Your business should be no different. Network marketing is not for everyone, if you don’t think you’ll have fun building a business, or if you really don’t like people, don’t join a business. Along these lines, the product should be something you believe in, not just a way to make money. If you don't believe you're adding value to your customer's lives by selling them your product, you will not be successful or happy in your business.
Now that you have eleven things to look for in a network marketing company, you are fully prepared to go out there, get some information and select a company and team that is right for you.
To check out the system you can use to generate and monetize qualified leads for your business click here
See also:
Rich Dad's the Business School - For People Who Like Helping People
Your First Year in Network Marketing: Overcome Your Fears, Experience Success, and Achieve Your Dreams!
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