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If you are considering starting a home-based business, you're faced with four
essential choices.
You can:
The Network or Multi-level Marketing industry has been around for about 40 years. In that time it has seen the con artists and the great successes, the legitimate and the unscrupulous. In a nutshell,
PYRAMID SCHEMES ARE ILLEGAL! A company cannot legally pay commissions for recruiting new participants. Commissions can only be paid on sales volume: yours and your downline's sales volume.
For someone motivated and willing to put in the time, effort and persistence needed to achieve his or her financial goals, network marketing companies provide the opportunity and the vehicle to achieve those goals. A distributor can with a consistent weekly effort and by following a few basic principles, over the course of a year or two earn a very decent second income on a part-time basis, or go all out and achieve complete financial independence.
The beauty of the opportunity is that it is given to all of us equally. What we do with that opportunity makes the difference. We can earn little or nothing, or we can dig in and earn a very decent income (without waiting for someone else to promote us!).
You don't need to work an opportunity full-time. You can put in as little or as much of your spare time as is consistent with your personal goal. Network marketing is based on the concept of duplication or leverage. That is, you personally distribute the companies' products, but you also recruit other distributors in your "downline". They in turn eventually recruit other distributors, and so on. You are paid commissions on the sales volume of your entire organization.
Even though you personally may not sell a lot of products in any one month, when you have many other distributors enrolled in your downline, each one selling some products, you can still make a decent commission on your group's sales. Many people are each contributing a little to your income. Likewise, others in their downline are adding to their sales volume and to their commission checks.
Building that group is up to you. It takes commitment, perseverance through failures, time and effort. And it means moving out of your "comfort" zone. There are no free lunches! Success doesn't walk through the door while you're sitting back watching TV!
Whoever says to you "Sign here and get rich quick" is lying! Run far and fast. An ethical, legitimate network marketing opportunity does not promise you $50,000 in 90 days -- or even in 190 days. It fact, it promises nothing but the opportunity. That's not to say that some people haven't earned big incomes. It CAN be done. It's up to you.
The fact is that most people are somewhat complaisant. They'd like that new house, or to be their own boss, or to buy a new car, but ... they're not willing to put in the work that it takes to get there.
Quite simply: the majority of people will never be rich, but almost everyone can increase his or her earnings.
Network marketing is a brilliant and explosive marketing concept. But like all businesses, individual companies can be ethical and well managed, or they can be run by shysters for a quick profit at the expense of their distributors, and the industry in general.
You may have heard it said that network marketing companies are playing on the dreams of people. That is, selling unrealistic promises of high income. But high achievers earning in excess of $100,000 per year in this industry are recognized and well known. And they came into the business at the bottom, with the same opportunity as you or I have. The only difference is that the Mark Yarnell's and the Don Failla's of the industry have aimed high and worked long and hard building their downline to get there. But they started like you can, with an investment of maybe a few hundred dollars in products, phone bills and prospecting materials.
Commit to your chosen company for at least one year. Read about your products, and about the industry. Listen to the advice of those who've made it and work closely with your upline. Work consistently and methodically. Persevere through down times. DON'T GIVE UP TOO EARLY! Rome was not built in a day!!
Probably the biggest single reason why people get discouraged is because they come into the industry with unrealistic expectations. They want a new solution without changing the old habits.
Somewhere they heard someone say that it's "easy" to earn extra money in network marketing, that it doesn't take much time or effort, that it costs little or nothing. People come into a company to "try it for a while". They've just taken the first step to failure.
Sad fact: most people just aren't as motivated by greater financial rewards as they say they are. Few people ever reach the top of anything. Only those who are willing to take the risks and do whatever is necessary to succeed even have a shot at the top.
Success comes only after many failures and much learning. Along the way some people will get discouraged and say "Oh well, this is too hard. I haven't lost much so I'll get out now." That's one more distributor for you to replace. As in all sales work, network marketing is a numbers game. You have to contact many more people than you'll ever sell products to or recruit. But take heart! With experience it gets easier and easier!
If you mortgaged your home and existence to buy an established franchise -- say a Haagan Daaz or a Dunkin' Donuts' -- would you commit yourself to do whatever it takes to protect your investment and make your business grow? Or would you close it down after a few setbacks or during a slow period, and throw away your money, time and effort? Of course you wouldn't!!
The handicap of network marketing opportunities is that the price of entry is low, therefore the exit price is also low. It's "easy" to get out, just as you got in. You haven't invested $500,000, or even $40,000. You've invested $50 or $500. And you haven't "committed" to making it work, you've "tried it". These are the people who leave and say "it doesn't work". And then there are those who stay and make it work big for them.
There are four things you must look at carefully:
PRODUCTS
1) Is this product in demand today? Is there a market for the product(s)?
2) Are the products high quality? Do they perform as promised?
3) Is the price reasonable for the quality offered? It does not have to be
the cheapest in its category, but the best!
4) Does the company guarantee its products? Does it have a refund policy?
5) Is this line of products "tried and tested" or something totally new?
6) Are these consumable products that can produce repeat sales and residual
income, or are they one-time impulse buys?
7) Would you buy and use the product(s) even if you weren't a distributor?
If not, that company is not for you!
THE COMPANY
1) Is the Company known and reputable?
2) Has the Company been in business at least 6 months, preferably at least two years, and yet under 10 years in your area?
3) Does the Company have strong financial backing? Many small network
marketing companies open and close their doors each year because they
simply do not have the money, expertise and products to sustain their
growth. Buyer beware!
4) Does the Company seem well managed? If it is publicly traded, you can
obtain a financial and SEC report of owners and earnings.
5) Does the Company have a clear statement of policies, procedures, any legal
restrictions, and product descriptions?
6) Does the Company have a buyback policy for unsold inventory in the event
you decide to terminate your distributorship?
7) Is the Company a member of any recognized direct distribution
organization (the DSA, for example)?
8) Is the Company holding out high promises or unverified reports of high
income earning?
9) What do you like most and least about this Company, compared to others of
the same type?
10) Does the Company have known leaders endorsing their products? Better
yet, are some highly successful and known people also distributors of this
Company?
11) Does the company require a large up-front product purchase? (front-end
loading)
THE MARKETING PLAN AND MATERIALS
1) Are the marketing materials attractive, professional and informative?
Are they clearly written? Do they convey a positive impression of the
products and the Company?
2) Are the materials reasonably priced?
3) Does the Company produce a variety of marketing materials to assist the
Distributor? (brochures, marketing cards, audio and video tapes, samples.)
4) Does the company offer training aids, tapes, videos, planners, workbooks?
DISTRIBUTOR TRAINING AND SUPPORT
1) Access to excellent upline training and support is critical to your
success in network marketing. Many people drop out discouraged simply
because they had little or bad upline support and training. Some
also fail because they are unwilling to take the time to learn from others'
experience, and to follow the basic rules of successful marketing in this
industry.
2) Is your potential sponsor committed to your success? Will he train you,
give you marketing and recruiting ideas and suggestions, go over your goals
and plans with you?
3) Will your sponsor offer on-going support and motivation after the first
couple of weeks? Does he/she assure you that you can call at any
reasonable time?
4) Does the Company offer a means of communication connecting all
distributors to their up and downline, and to the corporate headquarters?
This can be by phone, voice mail, fax-back, bulletin board, satellite or a
combination of these means.
5) Does the Company publicly recognize outstanding distributors in it's
communications?
6) Does it offer incentives -- bonuses, trips, prizes or other acknowledgments?
Almost everyone who's had some experience with network marketing agrees that it is great fun and excitement. In a good company, your group is truly a cohesive and supportive social group. You meet many people, and you have the opportunity to participate in company meetings, conventions, cruises and other company sponsored events. Enthusiasm and excitement run high!
Some companies offer considerably more support and training than others. You should inquire carefully about support (best if you can talk to other distributors already in that company). Try to get a reading on whether you're going to be on your own in the wilderness, or part of a group that's there when you want or need it. This is very important, and frequently overlooked or underestimated by newcomers to the industry.
Most people, but not all, get into network marketing because they'd like to make some money. Making money in this industry depends on a few fundamental factors. The soundness of the company, the quality and the market for the products, and your own enthusiasm, commitment and hard work.
In every serious network marketing company, some people are making 6-figure incomes, and lots are making little or nothing. The latter are often people who are end-users rather than business builders. People who dabble in network marketing with the "I'll try it for a couple of months" attitude. That doesn't earn serious money. Serious money means serious work!
Compensation plans also make a difference in your likely earnings. There are three prevalent types of compensation plans, each with a very different effect on group togetherness and potential earnings.
Binary plans start with one center and a left and a right "leg". It looks like this:
Ron
/ \
Joe Ann
/ \ / \
Cris John Mary DanEach person receives commission on his group's sales volume in a given time period, often on a weekly basis. New distributors are continually placed underneath a distributor in the downline, regardless of whether (s)he actually recruited the new person. Thus you may receive income from distributors placed under you in your downline who were actually recruited by your sponsor. This is called "spillover". (S)He recruited more than two people, and his/her extra recruits "spilled" over into your downline.
In the opinion of many professional network marketers, binary plans are not the most equitable and lucrative compensation plans around, but they are fairly new. Only a few companies feature them. This arrangement guarantees that you will always receive income on the sales volume of all distributors under you. There are no breakaway groups. One downfall of many binary plans is the need to keep the two sides "balanced", or you only get paid down as far as the shortest leg. The "leftover generally goes to the management and original owners.
Breakaway plans are older and more common in this industry. In a breakaway, the sponsor recruits as many people as (s)he can and places them on her/his first level. They in turn recruit others under them who are placed on the sponsor's second level or below. Income is generated from retail sales margins, as well as from product discounts offered to the sponsor as hereaches each successively higher "step". (S)He also receives commissions on her/his group's sales volume.
When one of these downline groups surpasses a specific amount of sales volume, that group "breaks away" from you and becomes independent. (Does not happen in Lifesyles®). Generally, the original sponsor then earns a much smaller commission on that breakaway group's future sales volume. It has broken away and become independent. This arrangement makes it much harder than does a binary plan for a sponsor to sustain a constant, high income.
Breakaways tend to form a diamond shape. That is, you recruit a few people on your first level, each of them recruits a few more, and by the time you get to the 4rd or 5th generation, the lines are maximized. The structure then looks like a rough diamond, with the maximum number of distributors on levels 4 and 5.
Studies of commissions earned in this type of compensation plan show that most distributors never develop their lines "deep" enough to reach the highest payout levels.
Matrix plans are known as the "5 x 4", (or 10 x 5) type plans. What that means is that you recruit 5 (or 10) people on your first level (there is not limit to the number of "front" line people you may have in your organization at Lifestyles), and you earn commissions on all distributors recruited by these first five (or 10) down through the 4th (or 5th) level, whatever the plan specifies.
Look at such plans very carefully. To make money, the highest payouts should be on levels 4 and 5, not deeper (Lifestyles pays a full 7% for a depth of FIVE levels!, plus an organizational bonus that pays to infinity!).
Some companies tout a huge payout percentage. Buyer beware! If a company pays out too much in commissions, chances are great that it'll go bellyup or be forced to make major revisions! Companies advertising high payouts frequently can do so because they know that few distributors reach those deeper levels or sales volumes high enough to earn the special bonuses.
As with any business venture, commitment and persistence further its chances of success but don't guarantee the result or the income. You may be outrageously successful, or you may just learn a lot and make new friends along the way. At a minimum, you'll gain experience and personal growth.
To succeed in Network Marketing, you must be prepared to do retailing, recruiting and training. Some companies -- those in which the distributors are the main consumers -- more heavily emphasize recruiting efforts. These companies generally offer household or nutritional products. Other companies rely heavily on retail selling, especially those whose products are not consumable. Choose what emphasis you prefer. If you would like to be a consumer but prefer recruiting to retailing, choose a company with that orientation. In either case, you will need to support, train and motivate (preferably INSPIRE!) your downline if you expect them to work for you!
THE OPPORTUNITY AND THE CHALLENGE TO EARN AND LEARN ARE WAITING FOR YOU!
Go for it! Find a company that is young and rapidly growing, but has a track record of at least 2 years (remember Lifestyles track record now spans eight successful years!). Check out the company management and financials. Be a product of the product. Make sure you LOVE the products. Success lies in your conviction and enthusiasm! Feel comfortable and confident with your sponsor. Make sure he/she will always be there to assist in every way.
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50 Reasons For Success
