So, you’ve decided to start your own network marketing or MLM business? MLM and network marketing is a powerful home business model, and offers anyone a legitimate opportunity to build a solid income working from home. However, as you’ve probably found, there is a lot of debate on the pros and cons of this business.
You may notice, in reading message boards and other discussions devoted to this business, that you find similar issues being brought up over and over. Following is a balanced look at two of the most common issues that involve perceptions of what’s wrong with MLM and network marketing.
The Recruiting Explosion vs Product Sales
The question of recruiting vs product sales is often discussed. Here is the typical basis for the argument. “New network marketing recruits get very excited about the idea of sponsoring people and seeing a geometric growth explosion in their business. However, at some point, someone will have to sell products to someone, or else the whole scheme will collapse and nobody will make money.”
I believe it’s better to look at it this way. Product will need to be bought and consumed by someone down the line. This can be personal consumption by the distributors themselves, or sales to customers. In a decent network marketing opportunity, you’ll have products that people want to use. Just spreading the word will create sales to consumers, as not everyone will want to participate in the business opportunity.
If people try to start a network marketing business without using the products, or referring them to others, this will tend to create the negative situation that MLM critics often bring up. Unfortunately, this can indeed happen if there is strong incentive to recruit based on commissions from purchases of start up packages, in the absence of any real focus on an actual ongoing product or service of value provided by the business.
If the whole scheme is focused on recruiting and making money from sign up bonuses or commissions on start up packages, in the absence of a quality product with value for ongoing sales and usage, you have some issues. The good news is, with a legitimate MLM or network marketing opportunity, this won’t happen. A legitimate MLM business plan will highlight recruiting and sponsoring as crucial activities, but all of this will be built around a quality product line that people will actually want to use whether they get paid for promoting it or not.
Recruiting Friends, Relatives, and Acquaintances
When talking about recruiting and sponsoring in network marketing, one argument always seems to come up. “Everyone who starts a networking business has a limited number of people they know, who they can approach with a business opportunity pitch. They must be ready to try to sell everyone they know on their business. After they have contacted all of them, where do they go next?”
I think this happened a lot in years past, and even today when an upline group teaches only the “belly to belly warm market” approach. In theory, you can contact and try to sell everyone you know. Then, hopefully, some of them will join and start doing the same thing with their warm market. Sooner or later, you should have a nice group going and a solid income.
In reality, it usually doesn’t work that way. Eventually, for most network marketers, it will become necessary to go outside that warm market if you want to expand your business to a full-time income level and beyond. This is where the Internet and modern technology has changed things so much.
With proper coaching and training, building a profitable network marketing business is easier today than ever. Success no longer depends on how many people you know, and how slick your presentation skills are. Thanks to the Internet, it is now possible to effectively reach hundreds of thousands of prospects who are searching for ways to start a business and make money from home.
MLM and network marketing as a business continues to evolve. Things are different now, and old perceptions are becoming less and less accurate. Once a function of how many people you know and your selling skills, today the key to success is attracting home business prospects to your opportunity when they are serious and ready to take action. This will continue to be the key to success in the future.