Frequently Asked Questions About MLM and Direct Sales Opportunities
With all the different opportunities out there, how do I know
what is legitimate and what isn't?
Look for an opportunity that has been around at least two years,
preferably longer. Like any other business, new network marketing/direct
sales companies can start and fail for reasons within or out
of their control. Companies with a record of long-term stability
and good service are your best bet. Examine a company like you'd
buy a car - learn all you can about the vehicle before you buy
in. Choose wisely and don't just take someone's word about it.
I don't want to be involved with a "pyramid" scheme
that will eventually collapse or be shut down by the government.
How do I know the difference between a legitimate network marketing
opportunity and an illegal pyramid scheme?
"Pyramid" schemes focus on fast profits earned by
selling the right to recruit others. They typically offer a
product of dubious value to make them look legitimate. Actual
profits are made by recruiting other people into the scheme,
not through sale of the product (and some schemes don't even
offer a product - they just move cash around). Legitimate network
marketing (also known as MLM or multilevel marketing) and direct
sales opportunities offer a tangible product with an emphasis
on sales to consumers who are not a part of the business itself.
What about "getting in on the ground floor" with
a new startup company?
That's a gamble. If you go in knowing the odds and have both
spare time and discretionary funds available, it is possible
that working a startup business can be rewarding. After all,
every solid and established network marketing company today
was a startup at one time. However, even the most promising
new opportunities can go bust in a relatively short time. This
can happen due to poor management, products of inferior quality
or marginal appeal in the real world, or even explosive growth!
That's right, a new opportunity can collapse if sales growth
outpaces the company's ability to grow and adjust to the demand.
A good opportunity will still be a good opportunity after the
"ground floor" stage if all the right elements are
in place. And the reverse is true; if the opportunity exists
only for a short time, the company won't have the longevity
to provide you with a long-term income. Be diligent, and choose
your business carefully! I recommend looking for a company that
has been in business a minimum of two years as a reasonable
starting point in your search.
What about compensation plans? There are so many different
types and it all seems confusing.
There are several types of network marketing compensation plans.
The most common are the stairstep breakaway, the binary, the
matrix, and the unilevel. Some "hybrid" plans combine
elements of these four types. Direct sales & party-plan
opportunities offer a variety of compensation structures based
on your overall sales volume. The bottom line is, you can build
a solid business and make money with any of these plans. The
most important thing when evaluating an opportunity is the company
(stability, service, and management) and the product line (quality,
effectiveness, market appeal, value). If you find a company
and opportunity that is managed well, has shown stability, and
offers superior products with good value you can make money
with any of these plans. The world's greatest compensation plan
(with all the bells & whistles) will be worthless unless
the above criteria is met.
Is it necessary to purchase inventory to get started?
In past years it was common to purchase and maintain a product
inventory for personal sales to customers. With the advent of
new technologies and faster-paced lifestyles, most companies
now have "direct ordering" capability that allows
your retail customers to call a toll-free number and place orders
by credit card or electronic debit. Typical purchases to get
started with your business may include business materials, sales
aids, and perhaps an assortment of products for your own personal
use and for demonstrations to customers and potential associates.
After I find a good network marketing or direct sales opportunity,
what do I do next?
Get with your sponsor and upline leaders and let them help you
develop an action plan for starting successfully. Many companies
provide sales and sponsoring tools at a reasonable cost. Your
new upline may have a support and training system in place for
you and others in their downline to use. The bottom line is,
no one set approach will fit everyone. People are different
and different people will succeed with diverse approaches. There
ARE very solid principles of business building that apply to
everyone, but a good support and training system will offer
options and flexibility. Your sponsor and upline should be ready
and willing to work with you individually to learn and successfully
apply the approach that is right for you.
What about building a network marketing or direct sales business
online? Can it really be done?
Yes. You can reach a large number of prospects this way. With
the right tools you can provide a lot of information to them
online as well, condensing your mail and telephone activity
to the most interested prospects. (These are the ones you want
to work with anyway!)
When prospecting online, however, it is still very important
to remember that solid business is built on relationships. Get
to know your best prospects and your new distributors, and help
them in any way you can. Developing good relationships online
is really quite simple, but many folks aren't aware of how to
do this.
Caution -- Beware of online opportunities that promise you
can build a strong and profitable business with no personal
contact, no phone calls, and so forth. Such ventures proliferate
on the Internet. The chances of building a long-term and dependable
income with such an approach is negligible, and that is putting
it nicely!
A final thought...
If you are willing to commit yourself to a positive goal, are
willing to help other people attain their goals alongside you,
and have the persistence and patience to stay in the game till
you succeed, you may well find network marketing is just the
right thing for you!
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