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What to look for in a Network Marketing Business

By Charles Hopkins Published 05/24/2007 | Home Based Business

Network Marketing is also called Multi-Level Marketing or MLM for short. If you happen to be thinking about getting into Network Marketing then this may be helpful for you. There are things to look for in a Network Marketing business that will keep you from just spinning your wheels and getting nowhere. It is true that most Network Marketing businesses fail. That is what happens to most any business in their first five years. But if you know how to do it right, then Network Marketing is the best career in the world!

You should be able to start with little cost. Avoid big sign-up fees and expensive frontloading where you have to spend thousands of dollars to get started, buying your way to the top of a pay plan, having to purchase large volumes to qualify for your check, and having to stock inventory yourself. Run away from anybody requiring you to do those things.

Do not fall for outrageous claims such as making money with no selling. In Network Marketing you can get people placed under you without having to do anything if the people above you are doing a lot of work and your compensation plan is a forced matrix or power leg binary. That kind of thing is called spillover, but you cannot count on getting rich from that. People joining with that expectation will be disappointed. Even worse, do not get involved with a company that is offering a business opportunity but has no product or service to sell other than the opportunity. Always, before you join any company, go to the Internet search engines and check for complaints and scam warnings.

Sales and distribution are the backbone of all business. Direct sales are the type we are more familiar with. The products of a company are peddled by a salesperson that receives a commission, which is a percentage of the money gained by the sale. That is the traditional sales approach. The salesperson can also be paid on an hourly or salaried basis, even per lead contacted as long as they meet a sales quota, but the source of income for business is always sales driven.

Network Marketing is proving to be a better way, both for the companies and their product distributors or salespeople. You are still selling a product or service for the company, but you also are looking for people who want to do what you are doing, selling the company's product and making money doing it. You are building a team. What that does is take sales to another level, because once you get someone else selling for the company, the company has a new distributor and you get paid not only on your sales, but also on the new distributor's sales as well.

That is why it is called Multi-Level Marketing. When that distributor on your first level gets a new seller for the company, you also get paid from the work of that new seller. If that new seller on your second level recruits, then you have a third level. You can have a team building under you, doing sales for you, making money for you, and it can be happening without extra effort on your part! The payment plans in MLM mostly include binary, breakaway, matrix, stair-step, and the best is unilevel.

With the unilevel plan there is no limit to the number of people you can have under you at the first level. The purchases from your first level are where you get the highest commission. Commissions for purchases from your second level on down are not as high percentage-wise, but can add up to a big amount through the shear number of sales. Those earnings are often called leveraged earnings because you have utilized the work and the time of other people. That is the way to get wealthy!

Network Marketing is about the referral and soft sell. You do not have to give people the hard sell to be successful. You simply use the company's product or service and recommend it to others. It helps a great deal if you are passionate about it. The company provides promotional materials such as sales letters, brochures, recruiting calls, recorded messages, websites, flash movie presentations, DVDs, and even magazines. They should be persuasive materials that put forth the benefits of the product or service to the prospect and should include plenty of testimonials.

The company should have a valuable and desired product or service that people would really want to have. Preferably, the product should be unique and manufactured by the company itself. You want the service to be a continuing monthly service or the product to be a consumable one, so that you get recurring purchases every month and an ongoing income from each customer.

With Network Marketing you will not just be making one-time sales as in direct marketing. You will be building a residual income that keeps coming in whether you work or not. It is the perfect way to build a retirement income, so the company you choose should be debt free and have been in business for at least 5 years so that you know it is solid.

Having found those things, you then present the business opportunity and the product to as many people as possible. Your warm market is people you know, such as friends, family, and co-workers. Beyond that, you can advertise, or buy lead lists of people interested in starting a business or interested in your type of product or service.

For Network Marketing the most targeted list you can get are MLM Genealogy Lists. Those are people who have showed an interest in Network Marketing by already having been involved in it. Do an Internet search for MLM Genealogy Lists if you want to buy one. Those lists are not expensive and many of the people on it already have experience building a business. Those are the people you want on your team!