Of all the business ventures available to us today, network marketing
is probably our least favorite
. Over the years, it has acquired a reputation for being unreliable and untrustworthy. We’ve heard horror stories of people who have had their hard-earned money swindled because of multi-level marketing. However, there also the too-good-to-be-true tales of success
. So, how much is truth and how much is fiction?
Read on to learn why some of the things you might believe about network marketing aren't necessarily true. MISCONCEPTION # 1: Network marketing is a sham
By definition, network marketing is a business strategy that compensates distributors not only for the sales they generate but also for the sales of the distributors they have recruited. It sounds like a pyramid scheme—a form of fraud that promises compensation for recruiting other people into the group rather than for selling any real product—but as of press time, it is considered legitimate
. In fact, some of the top brands you may be familiar with are employing this marketing strategy
. Avon, for example, has a direct selling program that has benefited a reported 5 million people all over the world. One way to keep up with direct-selling news is the World Federation of Direct Selling Associations website
(WFDSA).MISCONCEPTION # 2: Network marketing will help you get rich quick
Get rich quick schemes are usually very suspicious. Just last year, 22 Filipinos were reportedly scammed by a loaning company in the United Arab Emirates. Aside from being offered loans to pay off their credit, they were also offered additional compensation for bringing in new members. The whole thing turned out to be a complete fraud as the victims didn’t receive their due and were even set up for bounced checks. Network marketing is different. It will help you earn extra income if you actually sell the products successfully and a little extra more if the people you’ve taken under your wing generate sales as well.
If you have excellent sales and PR skills, you might be able to earn a lot more but selling is difficult, doubly so if the product is new to the market. Some people claim to have earned P 50,000 in just a matter of weeks but those individuals are few and far in between. MISCONCEPTION # 3: Network marketing is easy
It’s easy to get into, sure, what with the little amount of capital you have to invest but achieving success in network marketing is a whole different matter. Why do you think a lot of people fail at network marketing? It’s not for everybody. If you can’t get people to buy your products, how can you train your own group of distributors to generate sales? Network marketing takes work.
The first thing you must do is conduct proper research. Rhea Horrilleno, a Nu Skin Blue Diamond Executive, credits research for her success. She recommends finding out all you can about the company and the product
. Is there a market for it? Are the sales going well or are the products staying shelved? Should you choose to try network marketing, you need to find a good product with a good platform. If you don’t believe in the product yourself, how are you going to market it to others? MISCONCEPTION # 4: Network marketing is all about recruiting the most number of people
This is the key difference between a legitimate network marketing business and a pyramid scheme. Pyramid schemes depend on the number of people you recruit than the actual sales of the company’s products. When the company pressures you into putting more effort into recruitment than actual sales, then the business’ sustainability is in question. Besides, if all people do is gather more people, then how is the product going to move? And if nobody is selling, where’s the money coming from? Beware of the Ponzi scheme
—a form of fraud which uses the money of new investors to pay off old investors. MISCONCEPTION # 5: The newer the company, the better
A younger company doesn’t always mean better income. That said, an established company doesn’t always guarantee you success either. When choosing a company, look for one with a stable system and a good track record.
Look for one-of-a-kind products that you yourself would want to use. Remember to do your research as well. Don’t just rely on hearsay; do your homework
. (Photo courtesy of sxc.hu)