Choosing An MLM That Will Actually Make You Money
Copyright 2009 by Willie Crawford
A sad but true fact about network marketing, or multi-level
marketing (MLM), is that many people involved in the industry
never make any money. In-fact, the majority never make
enough to even cover their expenses.
Industry “conventional wisdom” is even that if you can keep
a person around long enough for them to make even a little
profit, then they are likely to stay. Show them a ray of
hope, and they will hang in there!
I’ve observed the industry over a dozen years, and studied
the entire history of the industry. I even know certain
key figures who were involved in landmark legal cases.
My formal education is in business and economics. I do
understand market forces, and what drives a business
towards long-term economic success.
There are certain things that make an MLM company successful,
and certain things ensure its long-term viability. At the
same time, there are certain things that ensure an MLM company
will almost always fail. Based upon my observations of those
things, please allow me to share with you the criteria that you
should use in selecting a network marketing company to join.
Here they are in no particular order:
1) The company should market a product that you would buy
without the income opportunity. If the only reason that you
join the company (and buy the product) is so that you can sell
it to others, you’re likely to at some point find the same
product offered cheaper via other channels. There has to be
a market demand for the product!
2) The product should not be available cheaper at the local
department store. That’s just bad economics. Your potential
customers would be foolish to buy an over-priced product from
you when they can buy it cheaper in local stores.
3) The product should be a “real” product, not a phantom
product. I’ve seen lots of MLM’s where the product WAS the
right to sell others the right to sell others the right to
sign others up. That is not a real product and those
companies are destined to fail (or be shut down by
government authorities).
4) The company should not make most of its money from
selling supplies to representatives. If the company’s real
model is selling you over-priced supplies, then the
representatives are destined to ultimately fail. The
company should offer supplies at close to cost, and be
genuinely interested in helping the representative make
sales of the primary product.
5) The company should not make most of its money from
selling product primarily to representatives. Those
companies only end up with a ton of representatives with
a garage-full of product that they never use. Those
representatives eventually grow disillusioned and go
in search of a better company.
If the company does not sell most of its product to the
consumer, it’s likely to fall under government scrutiny,
and also very likely to fail.
6) The company should not rely too heavily upon quick-start
bonuses to build and keep a sales force. Quick-start
bonuses often encourage representatives to look for ways
to cheat the system. Quick-start bonuses turn
representatives into recruiting machines, when the focus
should be more on helping those in the company actually
make sales and be successful. The emphasis should be more
on selling the product than recruiting.
7) The company should have been in business for at least
four years. That’s my personal criteria, but I don’t see a
logical reason for me to risk joining a company where the
management and/or the business concept are unproven. Given
that the vast majority of MLM’s ultimately fail, and also
the fact that there are a ton of companies to choose from,
why would you (as a potential representative) take that
risk?
I realize that if everyone followed this criteria, then
start-ups could never get off the ground. However, this
article is about choosing an MLM where your chances of
success are greatest. Going with a PROVEN company is
almost always better.
The product should not be a challenge to explain. It
should be something that people are already buying, and
use routinely. If the product is hard to explain, then
you face a major challenge before you can even ask for
the sale.
If the company recruits new representatives by wowing
them with flashy web pages, rather than offering a clear
explanation of the product, then I personally wouldn’t
touch it!
9) The company should not allow or encourage its
representatives to make outrageous income claims. The
reality is that you generally can not know what a
potential representative will earn. It’s also a fact,
as previously stated, that most representatives in most
MLM’s never make any significant income.
It’s also a fact that making speculative income claims
will bring a company under government scrutiny, and
increase the chances of that company getting shut down.
10) It should be obvious, in looking at the company,
its product, and its compensation plan, where the
money is coming from. If the company’s website or
brochures show how you can make substantial income,
yet you can’t figure out where that money would
originate, or how they could afford to pay that much
to very many representatives, then you should grab your
wallet, and run in the opposite direction.
The economics of the company simply needs to make
sense. You should be able to understand it!
I’ve just given you 10 criteria to use in selecting a
network marketing company to join. If all of those
criteria are met, you’ve substantially increased your
chances of being successful in the industry.
Most companies that you examine will not meet all of
these criteria. At the same time, MOST companies in the
industry will not survive long-term. You should be
looking for a winner, and therefore should insist upon
meeting all of these criteria!
——————-
Willie Crawford has been involved in direct sales for over 40
years, and has been running an online business for 13. His
favorite network marketing product is a simple system for
sending real (physical) greeting cards over the internet for
less than you can buy them at the local department store.
Test it out free at: http://WillieCrawford.com/greetingcards/
Tags: choosing an MLM, MLM, network marketing