3 Truths to Consider before Joining a Network Marketing Company

If you are a small business owner, entrepreneur, or employee in pretty much any industry, you've probably been pitched on joining a network marketing company. These pitches often come with promises of large commissions with little to no work at all. You've most likely been pitched that it's really easy…all you have to do is wash your face or drink those protein shakes while looking good and you will make a lot of money. So what is the real truth?

In all honesty, the reason there is such a big drop off rate in network marketing is because many people were told that this profession is a walk in the park and a piece of cake. They were told that they would hardly have to work, don't have to sell anything, or the product sells itself. Then when getting started, they realize that there is work that goes into building a real business, and that's not what they signed up for. Next thing you know, they've decided to leave. However, with over 20 million people involved in a networking marketing company in the U.S. alone, I think it's safe to say this industry isn't going away. The rise in social commerce has paved the way for how we sell and do business differently compared to traditional brick and mortar systems. Forbes even recently mentioned that 79 million new people are projected to start a virtual home-based business in the next 5 years. That's huge!

In a recent Huffington Post article written by best selling author and network marketing expert Ray Higdon, Ray shares how he used to be a skeptic himself and mentions that if you are skeptical about large payouts with little to no work, well…you should be. I would be too! That being said, here are 3 truths about network marketing companies for your consideration.

Network marketing is the lowest risk, lowest overhead way for MOST people to start a business.

As Ray points out in his article, if you've ever watched Shark Tank, then you've gotten a glimpse on what it takes to start and run a business. You will hear things like payroll, trademark attorney, supply chain management, commercial overhead, outsourcing, research and development, etc. Well, you don't need any of that to start a business as a network marketer. Network marketing allows people who love a product or service to share them with others, allowing them to expand over time (residual income).

The critical moving parts and structure of a business (accounting, payroll, website, shipping, etc.) are in place for you in network marketing. You just have to focus on selling and growing your business. In network marketing, you can find a company and product that has integrity and align with that company model and you don't have to worry about all of the critical aspects that go with starting and running a business. Statistics show that in the first year, 50% of businesses are gone. In 5 years, 80% are gone. In 10 years, 96% of all businesses fail. 4% of businesses make it and by making it, that means they are still standing, but not necessarily profitable. Business is so complex and that is why so many businesses fail because they are complex. There are so many moving parts to them that many people don't think about. On the flip side, if you join the right network marketing organization and they have a track record of real customers and aren't a pyramid scheme, then it is smart business.

5,500 new people join a network marketing company every day in the U.S. alone.

Let that sink in for a minute. The Direct Selling Association stated that members of network marketing went from 18.2 million to 20.2 million in 2015. That's 5,500 new people every day in the U.S. alone. So even though many people may complain about this profession, it's pretty popular and pretty much here to stay. If you are driven at all by impacting others, network marketing is a great place to do just that.

I agree with many of you though…just think about all of the people in network marketing pitching terrible, spammy social media posts with no value to others or post with empty promises on getting paid a lot of money to do hardly any work at all. These individuals are simply new entrepreneurs that have not had the type of training needed to properly represent the business opportunity. Ray also points out that if someone in network marketing has pitched you horribly, understand that they probably have a full time job and this is their first venture into being an entrepreneur. They may not be able to handle all of your objections or questions, and probably won't explain it right if they do.

Network marketing is NOT a pyramid scheme.

As Ray Higdon states in his article, "Those that don't understand how to explain it or hound their friends and family with the "next best opportunity" can definitely create some skeptics that instantly think pyramid. But again, this is just because of improper experience and training of the reps, not because of the actual model. A pyramid or Ponzi scheme operates off of the principle of "robbing Peter to pay Paul." In other words, illegal and very short term. Network marketing is perfectly legitimate, legal, and in fact endorsed by some of the biggest names in finance. Most people wonder if network marketing is a pyramid scheme because of two things…often times the structure is shaped like a pyramid, or they've just heard the term used and don't actually know what it means."

In regards to the network marketing business model structure being shaped like a pyramid…Can you think of one corporate structure, business, or organization that isn't shaped like a pyramid? Almost anything out there that has a company structure is shaped like a pyramid in some way, and it has nothing to do with the legitimacy of the business model. The term "pyramid" was thrown around pretty loosely, when in actuality network marketing is one of the most regulated industries around pyramid or Ponzi type activity. Network marketing companies have some of the strictest laws and therefore are extremely careful with how they incentivize the reps building their teams. 

If you come across any company that only pays people based on recruiting, run because it won't be around long. The media has a field day with these types of stories, but there is actually a very small percentage of them in the network marketing profession as a whole. However, when you find a solid company that pays people based on the sales of products from yourself and the team you build underneath you, then this is perfectly fine and a great way to create residual income. For example, say you own a real estate company…you start out with you being the sole realtor of your company but then you expand your company by hiring other realtors in order to expand your real estate network, all of those realtors are then providing real estate advice and help through your company's network and then giving you a little piece of the pie. Many people in this world build networks, look for networks and then increase the productivity of those networks. Reputable network marketing companies are no different. It's the same concept.

I’m in the anti-aging skincare business, so I’m always talking about skincare and empowerment in this particular field. It's my goal to work hard in offering something that can potentially benefit you and others, if you're open to it. If you enjoy skincare like I do and you'd like to learn more, feel free to reach out to me at [email protected]. I would love to have a conversation with you to see if this is a good fit for you.

Source:

https://www.huffingtonpost.com/entry/the-truth-about-multi-level-marketing-mlm-companies_us_5a1dc173e4b094f5c77e00ec