If you’re considering a network marketing opportunity, you’ve probably read a lot of opinions about the pros and cons of this type of business. Some heated discussions take place between those who are pro-MLM and those who are totally against the concept.
It seems there are a couple of common issues that are discussed over and over, and you will usually find these particular issues being talked about at length anywhere MLM and network marketing is discussed. While there are many arguments on both sides of these issues, here is a fair look at both.
The Promise of a Sponsoring Explosion and the Product Sales Question
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.”
A better way to put this, I think, is to say that product will actually have to be purchased and consumed by someone. In a good network marketing opportunity, with quality and fairly priced products that people actually use, there will be quite a lot of consumption and product usage by the distributors themselves. Retail sales to customers outside the marketing plan will normally happen simply by spreading the word (not everyone will want to be a distributor), so you should see product consumption two ways.
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 discussing MLM recruiting, this point often comes up. “All of us have a certain number of people we know, to whom we have the opportunity to pitch our business. Be prepared to sell all your friends, relatives, and acquaintances a business opportunity they may have no interest in. After you contact all of them, who do you talk to then?”
In past times, this was really a problem. Even today, some new network marketers are taught only to present the business to their warm market. The hope is that they will sponsor a few of their family or friends, and in turn these people will approach their own warm market and do the same thing. In theory, this will create a big downline group for you and generate a lot of income over time.
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.
Success in network marketing and MLM is no longer confined to who you know and how well you can work that local warm market of friends, relatives, and acquaintances. Anyone now has the opportunity, with the proper coaching and support, to tap into a virtually unlimited pool of prospects who are actively seeking ways to work from home or start home based businesses.
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.
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