4 Key Considerations in Choosing a Network Marketing Opportunity


The network marketing industry is undoubtedly one of the best business models offering a fair chance for an average person to make his millions. The industry continues to grow at a tremendous pace internationally. More than 60 million people earn their livelihood in Network Marketing generating in excess of $ 80 billion in revenues.

Yet the MLM or Network marketing industry accounts for highest number of failures, lost opportunity, and wasted human potential. Due to its very nature of being an absolutely democratic system and one of the best free enterprise models of business offering easy entry for entrepreneurs and businesses, it is a highly misused form of business with negligible protection for the average person. Lack of knowledge and awareness about the pitfalls compounds the problem further leading to negativity about a wonderful system of marketing.

Here are a few tips on what to look for and avoid before you join a Network Marketing opportunity. The list is not exhaustive but a few major indicators of what should not be acceptable while joining an Opportunity.

Avoid companies which stress more on recruitment and pays for recruiting:

The very rational of a business is based on selling products or services and generating a profit through meeting customers' needs. Check whether the network marketing opportunity you plan to join has a good product. Some of them offer a few products as a front but focus more on recruitment. If your opportunity is highly focused on the recruitment aspect my experience says that the failure rate of the individual joining the opportunity is going to be very high. In the event the opportunity also pays for recruitment directly or as hidden bonuses avoid the company like the plague. In many countries any bonuses or commissions paid for recruitment is considered illegal. At the least the WFDSA considers bonuses and incentives for recruitment as an unethical business practice.

Does the company have products which are innovative?

Traditional and widely available products may not be very successful in a Network Marketing environment. Of course there are exceptions. Network marketing products being marketed directly is through a process of consulting and then selling specialized products. Traditional shops may not offer a specialized consulting, counseling or even explanation of product benefits. You just pick up a product and walk to the billing counter.

In network marketing the product benefits needs to be explained and matched against a specific or perceived need. As an illustration, products such as weight loss or a herbal nutritional supplement requiring counseling may do better in Network marketing than soaps or shampoos which need very little explanation.

Does the company's marketing plan make you stressed?

Most companies have point system against purchased made which is converted to cash depending on certain achievement or targets. If you do not meet the required point levels you do not make any additional bonuses. You only get the retail margins. To reach higher levels of earning you have to start from a zero base every month. This may not be possible for the average person and only few heavy hitters in recruitment as well as retail are able to earn sizeable incomes. This induces considerable stress at the end of the month and failures when you are not ale to meet the required target.

Look for opportunities that have an accumulative or cumulative plan. Accumulative plans let you work at your own pace and accumulate the points and group volumes month after month and graduate you to higher levels of incentives and bonuses.

This is the friendliest system in Network marketing adopted by few companies. Chances of failure are minimal if you are working seriously on such an opportunity.

Is the entry cost high?

Now this is the most important aspect to watch out for. Many of the network marketing companies have a starter kit loaded with their products and entry costs are high. You may not even require or be able to sell all the products that come with the starter kit. Such companies again are heavily dependent on recruitment and make their primary sale at the point of recruitment itself.

The best practice is for a company to have few samples of the products along with the business and product manuals in the starter pack. at a very low cost. The starter pack should not be source of revenue either for the company or the sponsor. This enables for easy exit in case the business is not suitable for the person entering it.

Such low cost entry and exist options are offered only by a few organizations supremely confidant about their product and its utility.

Check the opportunity you want to join carefully on few of these parameters and keep your eyes and ears wide open to catch any unethical or unprincipled behavior from your organization or sponsor. This may save you a lot of time and trouble as well as money spent in joining a wrong home business opportunity.

R.G. Srinivasan is a Certified Trainer, Writer and Author with more than two decades of managerial experience. You can view his home-business resources blog at http://www.home-businessresources.blogspot.com for online marketing tips, resources, opportunities and online promotional strategies

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