If you’re just joining us, we’re having a conversation about network marketing, multilevel marketing, and trying to figure out if it’s worth investing in. Read my initial thoughts on the subject matter here.
What exactly is network marketing and multi-level marketing?
Example of a Network Marketing Strategy
According to Wikipedia, network marketing is a type of marketing strategy that goes through the networks of independent people. For instance, instead of building a network of 50 people and selling my one product to all 50 people. I’m going to sell my product to you, get you to sell it to 50 people in your network, and you’re going to do the same. The idea is to make money from the initial sale, recruiting you into my network, and through your sales and the sales of the people you recruit.
Example of a Multi-Level Marketing Structure
It’s important to note that multi-level marketing is a business model and not necessarily a form of marketing like network marketing. MLM typically refers to the compensation structure of making money on different “levels” or down line as it’s often known as. The more people you have in your down line the higher the commissions you’ll make. However, most network marketing companies or programs have a multi-level marketing structure and so the two terms are often used together or interchangeably (Company XYZ may market it’s products using the network marketing strategy, but have a multi-level marketing compensation structure).
Reason #1 Why I won’t invest in a network marketing business – Too time consuming
As I stated in the introduction to this series, I will never join a network marketing group or program because they’re a bad investment of time. “How is that?” you ask. @nicoleangelo, a member of this blog’s community said it best,
. . .true success depends on others; u don’t advance unless you have a team that’s selling . . .
When you start in a network marketing program you spend so much time building your network that you never really get around to selling much of your product. Spending too much time building your sales force and less time building of relationships with customers will ultimately hurt your sales.
Reason #1 Why you might invest in a network marketing business – Let your empire do all the selling
On the flip side of the equation, if you take the time to build your sales team you may be able to pull off a substantial amount of sales. I don’t just mean recruiting others to sell the products, you’ll have to train and support them as well (especially if you have inexperienced entrepreneurs). Build up top sellers in your team and you won’t have to sell anything. In theory your team would do all the grunt work for you. Of course, this dream of a sales team that “sells itself,” will only come true if you put in the necessary time to build it.
Biblical Perspective
Here’s where the plot thickens . . .what does the Bible say about how we spend our time? Ecclesiastes 3:1-8 reads;
For everything there is a season, and a time for every matter under heaven: a time to be born, and a time to die; a time to plant, and a time to pluck up what is planted; a time to kill, and a time to heal; a time to break down, and a time to build up;
So, if you’re going to invest your time into a network or MLM business make sure that it’s in the right season of your life. Seek God’s direction concerning it and make sure you keep your motives and mindset in the proper order to be successful.
I want to hear from you, do you think network marketing is too time consuming? Or, will the time and effort invested yield great results? If you’re already working a program like Mary Kay, Pre-Paid Legal, Primerica, and etc., feel free to chime in with your two cents. Next we’ll explore the financial aspects of network marketing and why I think it’s a waste of money.
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About the Author
Rod
I am not a big proponent of MLM, but I think that building a business is time consuming either way. Your going to spend time either way you look at it, either training others, or doing it yourself. Great post, very thought provoking!
You're right Steve, building a business is time consuming either way. But, how much more time could be spent building your OWN business rather than someone else's?
But, as an MLM rep, I could then argue that I am building both their business and my own
That's true that there might be a conflict of interest in which you might as well just work on your business. But, that's my point. Thanks for chiming in with your comment Steve!
Take a look at what the Washington Times and Robert K, Donald T, and other millionaires about networking marketing!
Thanks, Michael, I'm pretty aware of what they think about network marketing. However, I want to know your thoughts on the subject. Do you currently participate in a program?
Great post, Rod. It's fantastic to hear a positive, constructive discussion about the pros and cons of the MLM and network marketing industries, versus an extreme rant (for or against!).
I consider myself a growing entrepreneur, a 20-something venturing into several different types of businesses. For the past four years, I've used network marketing companies as my launching pad. Honestly, I'm using it as an easy way to begin learning about all aspects of entrepreneurship – customer service, sales, leadership, personal development, motivation, communication, etc. One benefit of MLM businesses is that they have really low barriers-of-entry. Anyone can easily join. That can cause problems, however, as the very nature of “anyone can join” means that the vast majority of members do not possess the intelligence, discipline, or motivation to succeed! As a young entrepreneur dedicated to personal development, gaining experiences, and finding success, it was perfect for me.
I've been a part of three different companies. I failed miserably with the first two and found wonderful success with the third – a huge testament to the fact that you have to find the right company. I was more knowledgeable after my first two failures but I was doing the same things in the same ways, the third company just had a better set-up. So, I always recommend to anyone considering a network marketing or MLM business to make sure and evaluate the foundational set-up of the company. I love and am passionate about mine (would be glad to share it with anyone who inquires) but am well aware that there are many great companies out there who have members making a fantastic income. The key attributes to look for in a company are:
- a consumable product
- low or no membership fees
- a duplicatable system for building the business (this is MOST important)
- correct timing of the company & product industry
- minimal # of products or product focus (1 is ideal)
There are many nasty companies out there, so be careful! There are also a good handful of companies that meet the above criteria. You have to dig, but you can find them. Make sure any company you're evaluating has solid corporate leadership, a team culture, and several members who have already found success…and make them PROVE how much they are making to you.
I agree with Steve's comment – building an MLM business is just like any other. It takes dedication, persistance, and consistent effort. The consistency is the most important. Work your business 5 minutes a day or 12 hours a day, it doesn't matter, just be consistent. I have built my successful MLM business for two years around a full-time job and several other business ventures – it's possible if you're willing.
Thanks again for the post, Rod! Looking forward to hearing other opinions!
Annie
Hey, Annie, I'm glad you liked the article. I think it's pretty interesting that you started down your entrepreneurial path maximizing network marketing. I wouldn't say that you failed in your other ventures, they prepared you for the success you found in the third. Thanks for listing what to look for in reputable MLM companies. I'm sure everyone reading this will find it helpful if they decide to find a program. Thanks again for your awesome comment!
This article is concise, well written and informative. It is part of a series from The Success Center.
This article is concise, well written and informative. It is part of a series from The Success Center.