“Do’s and Don’ts of MLM”

Written by, Samuel K. Burlum, Investigative Reporter, and author of The Green Lane, a syndicated column, Published on 8/17/2018, a SamBurlum.com Exclusive

Tags: American Free Enterprise, Business, Direct Selling, Multi-Level Marketing, Network Marketing, Opportunity, Small Business, Relationship Marketing, Home Based Business

Source: So… you have decided to get involved in a multi-level marketing business opportunity. After spending hours of research on the right opportunity, you are ready to roll up your sleeves and get to work. How do you assure yourself greater odds of success? We provide a few tips.

Every multi-level marketing business opportunity has a recipe for “success” which is usually provided by the MLM parent company, and offered by way of training materials, tools, books, and audios. There are some basic key concepts to keep in mind when building your team and customer base. These key concepts may seem simple, however are often overlooked, leading many in the industry to disappointment and failure.

One of the very first things to keep in mind is to pay close attention to every detail related to the process of sales and recruitment, and to the fine print of company policy & procedure and compensation plan. Many network marketers fail to collect on every benchmark they achieve because they miss a step in the process of submitting paperwork or forget to fill in a required field on an online form. Within the independent contractor agreement and compensation plan, there are specific details related to how commissions are earned on product sales and on sales from a downline that may not have been presented during the initial opportunity introduction.

Network marketers must have an understanding that their new opportunity should be treated as if it is a business they personally own. Discipline, motivation and consistent daily action are crucial for success, for if positive results are not produced, no compensation is earned. The network marketer should have a thorough understanding of the products they represent, the market they serve (who will need them), and a willingness to handle objections and even deal with disgruntled customers.

The network marketer should be a product of the product. The best sales representative is a person that has a personal experience with the products they are selling, and can convey their personal story or connection with those products to others. A network marketer should sample each of the products they intend to promote, and focus primarily on those that have the greatest impact on them, rather than those they did not personally enjoy or find beneficial.

Research the ideal consumer market and start there. Many network marketers will begin pitching their product offerings to a list of family, friends, neighbors, and other associates from within their local community or network. What network marketers need to understand is once they have exhausted their list of contacts, they will have no choice but to engage with strangers. Sales representatives, in general, who focus on solving problems and filling a need, develop a customer following and are more successful than their peers who primarily rely on friends and family to buy their products.

Network marketers need to have a definitive plan of execution in reaching their target market. In discovering where your target market might be located, you will want to put yourself in the shoes of the potential customer. What are their likes, dislikes, consumer behaviors and habits? What influences their decision making? Your discovery process should include learning why your potential customers make the choices they do.  This will apply to building your team network as well.

Network marketers need to set realistic and obtainable daily, weekly, and monthly goals, and stay disciplined to achieve the set benchmarks. Network marketing is about making repetitive consistent efforts over a long period of time. Where many fail is by having the desire and intention of making a big splash of achievements in the beginning, so they could sit back and allow for their downline to do the rest. When they don’t achieve success in the short time line they hoped for, the disappointed network marketer often quits. Network marketing is a battle of time and milling through the field of potential prospects. The network marketer that is willing to spend less time per week, but willing to work years at the business, will have far greater returns than the network marketer that works feverishly in the first 30 days and does nothing thereafter.

Another practice of becoming a better network marketer is to develop your own personal brand that can help separate you from the field of thousands of other network marketing representatives. What makes you so different that a potential prospect should buy from you instead of your competitor? It will be the little things that matter – returning people’s calls, texts and emails, answering questions, helping people with their paperwork, being supportive of other members of your downline, and being a team player. These are just a few ways you can create your personal brand.

The career network marketer should have some of their own personal business tools, such as a business card, website, social media page, hotline, group newsletter, and blog post. These are places where you can tell your story and the stories of your personally connected satisfied customers and fellow network marketing colleagues.

Network marketing is just that, networking. Every network marketer should be engaged in a business organization where he/she can meet with other fellow business leaders and potential customers. Building relationships within this community will provide credibility that you are a professional and not some lone wolf trying to look out only for yourself. Within these business groups, look for opportunities to be of service to others.

Most importantly, the network marketer must have patience. Customers and members of your “team” will come and go. There are natural consumer life cycles to every product or service. You must continue to be diligent in developing strong customer and business relationships, and keep in mind that some of your recruits will not produce a thing and end up quitting the opportunity. Quitting over someone else quitting will yield zero results.

Not all network marketers will make enough money to quit or replace their day jobs. It takes time, monetary investment, and a keen ability to work with other people to achieve any level of financial gain in network marketing. Those who are not ready to assume all the risk should yield to caution and look for other career building opportunities.

Samuel K. Burlum is an Investigative Reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Samuel K. Burlum is also a career entrepreneur, who currently lends his expertise as a Consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of “The Race to Protect Our Most Important Natural Resource-Water,” and “Main Street Survival Guide for Small Businesses.”

 

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“It’s a Pyramid Scheme…”

Written by, Samuel K. Burlum, Investigative Reporter and author of The Green Lane, a syndicated column, Published on 8/2/2018, a SamBurlum.com Exclusive

Tags: American Free Enterprise, Business, Direct Marketing, Multi-Level Marketing, Network Marketing, Opportunity, Small Business,

Source: Multi-level marketing has received a great deal of criticism throughout the years, being accused of scamming people out of their money while coaxing them with grand visions of financial independence and lavish lifestyles. Though the odds have not always been in favor of the average network marketer, we uncover the myths versus facts of network marketing business opportunities.

So why does multi-level marketing receive such negative press and opinion? Chances are, the majority of negative opinions were developed by individuals that tried to make a go at becoming successful in a multi-level marketing business venture, and failed to achieve the success that was originally advertised. The statistics are not pretty, however when you compare them to how many people start a traditional business and fail, or how many people try to become professional athletes and fall short of their desired success, the statistics are relative to other career aspirations that are not achieved.

According to a Report authored by Robert FitzPatrick in 2005, over ninety-nine percent of individuals that got involved with multi-level marketing business opportunities ended up losing all of their investment. Studies performed by third party consumer watchdog groups have proven that between 990 and 999 people out of 1000 that have signed up as network marketers have lost their entire financial investments; and for some, because they had dedicated so much time to their multi-level marketing businesses, were let go from their day jobs or lost out on other career opportunities. It will be interesting to see if these numbers change as the industry transforms.

It is difficult to decipher the true number of MLM profits, losses and sales revenue from retail customers versus the network marketer participant’s product purchases because most MLM companies historically have not disclosed the data that makes a clear distinction between sales revenue from their consumer-only audience versus sales revenue from their own network marketer participant audiences.  Because there has been little incentive to solely focus on consumer retail sales, and much of the focus in the industry’s business training has been directed to recruiting a “downline”, few network marketers have focused their sales efforts on establishing retail sales only.

The fact that most MLM parent companies’ total gross revenue is not in direct relationship to what each independent distributor earns creates a blur between the numbers, a truth often skewed when a MLM company is presenting an opportunity. If the math and the probability of success is not in favor of the network marketer, why do people still sign up to participate?

Some individuals join the networking side of the business because they enjoy the parent company’s products so much that they continue to purchase them, but desire to continue making their purchase commitments at a significant discount. In some cases, the consumer then becomes their own network marketer and tends to save enough on product discounts that their fee for joining is covered over time.

Some individuals are drawn to the social lifestyle and travel, the added value of education and training, and networking with other like-minded individuals; thus treating their distributorship more like education and/or a social club membership. In some cases, this training, networking and the connections made also benefit their other businesses or day jobs. Some individuals just enjoy the flexibility that the MLM opportunity provides, and want complete control over their own schedules. Sometimes these individuals might be involved with more than one MLM opportunity, where they may profit from cross pollination of their networks from one organization to the other (though most often frowned upon and against company policies).

Some individuals become network marketers because they believe that they (and their team) will defy the odds and strike it rich, hoping to find themselves at the top of the pyramid after the masses of other people quit. For some, the idea of “owning a business” or being “in the business” is attractive, and they will leverage that representation to recruit others into their organization.

In the legal sense, a network marketer does not own their own business (unless they have their own corporation or limited liability company that is in contract with the MLM parent); because the network marketer does not own any hard assets owned by the MLM parent organization. The Network marketer does not own the patents, intellectual property, physical property, inventory (in most cases), or other intangible business assets such as a website or domain name; nor can the distributor’s “business” be sold or acquired for a profit (in most cases).

Multi-level marketing companies have had their fair share of legal bouts. In the 1980’s, the Amway Company was met with much criticism and negative press. As of most recent, HerbaLife faced the wrath of the Federal Trade Commission. Yet network marketers that remain committed to multi-level marketing claim they have benefited from their involvement and have seen a return of investment after three to five years of dedicated efforts.

Skeptics, media, and government agencies focused on consumer protection argue that a multi-level marketing agency crosses over to a pyramid scheme when it pays more focus and monetary benefit for new network marketer recruitment than on product sales commissions, where the participant (the network marketer) can only make sales commissions on consumer retail sales if their downline is meeting mandated personal consumption inventory buys; and in order to earn either bonuses from recruitment or sales commissions, one is most often required to maintain an automatic shipment purchase of company products themselves that also may include a number of pre-requisite items such as tools, marketing materials, and training materials.

There are some multi-level marketing companies that do focus more on the products and services offered than on network marketing recruitment of new participants. Companies like Primerica and Pre-paid Legal focus on the sales of services, and encourage their network marketing representatives to be successful at selling these services before recruiting new people into their downline. These companies also have no required auto-ship.

Some companies have changed their business model to adapt business practices acceptable to watchdog groups and government agencies. Some have also eliminated the requirement for auto ship purchasing, and have increased compensation benefits to allow individuals who only desire to earn commissions on sales of products, to do so and see a return on investment within a reasonable time period.

The perspective of ‘being a product of the product” holds true in successful product promotion, and most people are drawn to specific MLM companies because they see the value and benefits of the products that the company offers. However, many folks who are introduced to these companies have limited financial resources and are already struggling to get by. Though they may like nothing more than to be able to personally enjoy the benefits of the company’s product lines every day, they may not initially have the means to purchase them monthly while doling out the expenses of building their business – such as tools, training and fuel. It is also important to keep in mind that it takes time and training to build the knowledge, skill sets and relationships necessary for success; and most often, little (if any) monetary earnings will be recognized for the first several months, especially for those who are new to the industry.

If you’re still intrigued and contemplating whether or not the MLM industry might be for you, your next step may be to research a few multi-level marketing companies, along with their products, culture, and compensation plans with a fine eye focused on detail and the fine print. Before joining a MLM organization, you have the right to research and ask for reports on the average payouts per year to new recruits, statistical and historical analysis on success/failure rates of network marketers within that organization, and for a review of consumer complaints related to the MLM parent company’s product offerings. Once you have found the MLM opportunity you are comfortable in working with, continue to move on with your new business opportunity with cautious optimism.

Samuel K. Burlum is an Investigative Reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Samuel K. Burlum is also a career entrepreneur, who currently lends his expertise as a Consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also the author of “The Race to Protect Our Most Important Natural Resource, Water;” and “Main Street Survival Guide for Small Businesses.” 

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