Network Marketing Business - Is it For You?

Too many people jump into a Network Marketing business opportunity only to find after few weeks that they are not made for this business. This article will help you decide whether this is really the business you want to be in.

Network marketing or MLM is a business model which involves direct selling of products and services of a company via independent representatives. These representatives also form the major consumers of the companies' products and services. In addition to receiving commissions on direct sales, the representatives can also recruit others under them and in turn receive commissions on sales made by their downline. Under how many levels one can receive commissions varies from company to company. In order to safe guard the interests of its representatives, there is an absence of store-fronts and the products and services of the company are not marketed through traditional media.

Differentiating a Network Marketing Model from a Pyramid Scheme

Many people fail to differentiate a legitimate Network Marketing Model from a pyramid scheme and hence prefer to stay away from all Network Marketing businesses. One of the major differences between a MLM business and a pyramid scheme is that, in a pyramid scheme there is either no sale of products/services or the value of the products/services sold simply does not justify its price. The products/services sold, if any, are mere disguises to show that the business model is legal.

The main emphasis in a pyramid scheme is only to get more people signed up and book instant profits. There is only one way flow of wealth from bottom to top and no corresponding value flow from top to bottom. As a result, only those on the top of the pyramid make the most money and the ones in the bottom struggle to break even.

The most popular example of a pyramid scheme is the infamous chain email scam wherein you send $5 to each of the five names in the list for some top secret manual. Then you add your name to the top of the list, remove the bottom most name and send the same email to your friends. As you can see, people get involved to make money and not for the secret reports.

In a legitimate Networking Marketing model, there will be sale of products/services whose value is proportional to its price. Even though majority of people join because of the opportunity to create wealth, there will also be a significant number of the people who just use the company's products/services and won't be interested in the opportunity aspect. So by simply evaluating the quality and pricing of products in the line up of a Network Marketing business, one can conclude whether the business model is legitimate or not.

Advantages of Network Marketing Business

1. Low entry costs. Unlike traditional businesses and franchises, a Network Marketing business offers significantly lower entry costs to get started.
   
   
2. Flexible work hours. You are your boss and you decide when and how much effort to put into your business.
   
   
3. Proven plan and marketing system. The company has a proven business plan and marketing system in place which you just have to follow. You don't need to do reinvent the wheel.
   
   
4. Support of a sponsor/mentor. You are not alone when it comes to building your Network Marketing business. In case you need any help, there is always your sponsor whom you can get in touch. If your sponsor isn't qualified enough, there is your sponsor's sponsor, and so on. In other words, there is always some one experienced enough to guide you.
   
   
5. Residual Income. You'll not only enjoy the fruits of your own labor but also from the efforts of your downline. This way, after you have established a successful downline, you can continue to receive income even if you stop working for some time.
   
   
6. Regular motivation and support. Motivation is an important driving factor in a Network Marketing business. In the beginning, the motivation is high and everything appears doable. Majority of Network Marketing businesses get their successful representatives to conduct seminars and meetings in regular intervals. Attending them keeps you motivated and charged up. Some businesses even have a good collection of tapes you can listen to.

Disadvantages of Network Marketing Businesses

1. Unpleasant approach to recruiting. Recruiting is most feared and disliked by majority of entrants into Network Marketing. You'll be required to get in touch with all your friends, relatives and even those with whom you had a brief acquaintance with, and convince them to join you. In the process you'll be alienating lot of friends and associates. This will often make you wonder whether it's worth pursuing your business.
   
   
2. Curb on creativity. Many businesses have restrictions on the marketing methods to be employed. For the creative entrepreneur, this may act as hindrance to develop their creative talent.
   
   
3. Minimum monthly commitments. Most Network Marketing businesses will require you to purchase a specific volume of products/services every month which you can either use it yourself or sell it to someone. If you have regular customer base interested in your products/services then its fine, else you must be prepared to use the products/services yourself.
   
   
4. Takes good deal of effort, persistence and motivation. No need to stress here. Network Marketing requires lot of effort and dogged persistence to succeed. You have to be an effective speaker and must have a never say die attitude. Rejections will be a part of your life and you must be prepared to embrace it. For every 10 people you approach, only one may join you. And for every 10 people that join you, only one might work as hard as you. Yes, this is the fact.

As you can see from above, MLM or Network Marketing is not for everyone. There are certain prerequisites that you must possess or be willing to cultivate. If you are a self-starter, require no motivation and possess leadership qualities, then this business is for you. If you need constant motivation to get things done, dislike people and wait for things to happen, this business is probably not made for you.

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Additional articles in this section:

Network Marketing Online - Why a Website is a Must?
When Network Marketing online you have two options - buy leads and run out of resources or build a successful website and generate a steady stream of high quality leads for free.

Top 10 Ways to Generate Network Marketing Leads
There are innumerable ways to generate Network Marketing leads. However, you must see to it that the method you employ must also be easily duplicable by your downline with equivalent results.

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