How to succeed in Network Marketing?

by Bala Swaminathan
bs@cs.wustl.edu

To suceed in Network marketing, you must choose a company that in right for you.

When I consider a Network Marketing (or MLM) business, I look for four important things in that business: (1) the company, (2) The Plan, (3) The Upline (support), and (4) The cost of monthly maintenance. The monthly maintenance is very important and unfortunately that is hardly ever discussed with a new distributor.

1. The Company:

Reputable: Are you comfortable mentioning the name of your company in front of someone you respect/admire? If not, you are better of not going with this company.

Assets: If your company is debt free, it's a good sign that their finances are solid.

Support: Does your company allow you, your downline, and your customers to buy directly from the company? Again, does your company pay your downlines directly? These are very important and typically decrease your paper work and let you concentrate on more important aspects of your business.

Products: The demand for the products must not decrease. Consumable products are a good category of products that fall in this class.

Product pricing: Be very honest with yourself and ask, "will I buy these products (at the retail or even the distributor price) if I am not a distributor?"

Startup cost: Lesser the better. For me, any startup cost that is more than $25 is unreasonable. And if there is a `fast-sign up' bonus (for recruiting), I suggest you run away from that company!

2. The Plan:

If you have a good upline, the plan typically doesn't matter. Nevertheless, just make sure that you can understand the complete plan. You don't want to embarrass yourself, when your downline seeks clarifications on some parts of the plan.

3. The Upline:

Try to know as many people in your upline as possible. It is good to know at least two of them. Find out if he will actually sponsor people under you. For example, if you are in a forced matrix or if your upline is part of a downline building organization, then he has no choice but to "spill" people to your group. For breakaways and non matrix, you have to ask your upline how they are structuring their group.

If your would-be sponsor refuses to show his organizational chart, stay away from him. This most often means that he has lied to you about the size of his group.

It is convenient to get in touch with your upline if he has voice mail or email or 24hr fax.

4. Monthly maintenance:

This is the most important part of your business. This is the one that decides, whether you want to and can continue with your business in the long run, especially when things aren't going the way you want them to be.

Here are some of the ``hidden'' costs that are associated with MLM. a. Weekly meeting cover charge

b. Monthly meeting cover charge

c. Voice mail/email/Fax charges

d. Cost of weekly/monthly motivational information

e. Difference in cost of products you buy that are more expensive than equivalent products in other MLMs (not stores).

f. Gas expense incurred because of the business

g. Eat-out expense incurred because of the business

h. Long distance expenses incurred because of the business

i. YOUR TIME (simply count $5 per hour or part there of)

j. Cost of annual/semi-annual/quarterly conventions, that you are encouraged to attend, normalized to monthly expense.

Add all these costs and if it is, say, $120 ($4.00 per day), then your chance of making money in this business is proportional (1) to the number of people that can afford to spend (or invest, if you may) $4.00/day over and above their current style of living, and (2) to the number people from whom you withheld these hidden costs! Either way it is not a good deal.

Personally, if (e) is significant, I would start looking for a different company. And if the total is more than $5/day, then I will not be comfortable in shelling out the money and would be in the look for a better deal elsewhere.

Best wishes smiles `R' us ! Bala (bala@stl.nexen.com)