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Independent Watkins Associate 122236

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!


The statements made and opinions expressed on this page are those of the Independent Watkins Associate who is the publisher of this document, and are not to be construed as the statements or opinions of Watkins Incorporated.

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Network Marketing and Direct Sales FAQ's

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