I've recently been on a search for a reputable network marketing company with a product and comp plan I thought would make me money. As a mom, I have different priorities than some of "typical" network marketers (at least in way I picture them) - but still want to increase my income so I have more time to spend with my kids!
Now before you say "ughhh" to network marketing, let me give you a few facts: ·There are a lot of people who have been made wealthy through network marketing ·There are some very high quality products sold through these companies ·It's much less expensive for a company to use commission-only reps (you!) to sell their products rather than mounting a major advertising campaign and buying shelf space in retail stores ·When franchising first started, many people called it a pyramid scheme, said it should be illegal, and generally thought badly of it. Franchising is now an established way of doing business, and I suspect network marketing soon will be as well. ·You don't have to hassle your family and friends to do network marketing. There are new approaches which use mass media such as classified ads and internet to identify interested people. Your job is just to tell them about opportunity and see if it's right for them. I'll give more detail on this below.
A couple terminology items before we get started: ·Upline: This refers to all people "above" you in hierarchy of company. The person who signs you up for a network marketing opportunity is your primary upline. ·Downline: This refers to all people who sign up "below" you in company - either directly signing up with you, or signing up with those who you brought on board.
Here are some quick facts about way network marketing works: ·You are responsible for selling products and for bringing on others to help sell products. In most programs, emphasis is on bringing on others - since sales can be increased much more quickly by a group than by an individual. ·All orders are sent in to a central location, and company sends products ordered directly to purchaser. (In "old days" people often had to keep a stock of products on hand in their garage, but this isn't usually done anymore.) ·The company provides extensive marketing materials for you to use in selling and recruiting. ·You have a great deal of flexibility in how you run your business and in hours you put in.
Evaluating a network marketing company:
If you think you might be interested in network marketing, your next step will be to start looking at opportunities available and to find right one for you. There are a lot of them, so I would suggest you first define what you want (read info below and you'll be ready to put a list together) and then look for opportunities that match up with it. Here are things to look at:
The Product ------ It is important that you can get excited about product. If it's something you aren't interested in, you will never be successful at it.
In addition, look at use of product. If it's something which is used on an occasional basis, you will need a lot more customers / downline reps to sell a particular amount of product. If it's something which is used on an ongoing basis - vitamins, cleaning products, meal replacement shakes - you will have a higher level of repeat sales and a more stable income stream, since people will order these items on a regular basis. I would strongly suggest you find a product which is consumed on an ongoing basis.
The Company ------ As in any industry, majority of network marketing businesses fail in first five years. Therefore, you need to be extremely careful in selecting a company that will stand test of time. The easiest way to do this is to select only a company that has a track record of increasing sales and profits for at least five years. This narrow field drastically.
On plus side, if company you're researching is public traded, so much better. It will be easy to scan financial statements and quarterly earnings reports. You're looking for a company that is well managed, solvent, with little or no debt, that has reached a critical mass of distributors to sustain growth and that has been around enough to have worked out all beginning bugs.
Compensation ------ The most important consideration when choosing a pay plan is number of people that you must enroll to begin earning income. The lower number better.
There are five or six different and competing systems that network marketing companies use to reward their distributors/associates/affiliates. They are breakaway, unilevel, matrix, two-up, binary, and various hybrid or combination plans. Each of these is described in more detail below.
The stairstep/breakaway compensation plan is without question most common of all compensation plans. It is also responsible for most of really big money being made in network marketing industry. However, this big money is being earned by a small percentage of those distributors involved in breakaway opportunities. What does set breakaway apart from most other plans is that they are definitely geared to a full time effort. As a result, attrition is higher with breakaways as well as expense involved in working and building a distributor base with them
The Breakaway plan generally has 3 or 4 increasing rank positions that can be achieved by meeting progressively higher sales volume requirements over a specified period of time. All distributors under you are considered part of your personal group and their personal sales volume combines with yours to help you to move to these progressively higher rank positions at which point you will breakaway. You will generally earn higher commissions on lower rank distributors under you (in your personal group) and this commission will decrease as they too move up stairsteps to breakaway side.
When you do breakaway, you become your own "organization" - in other words, you are no longer part of your upline's group. Your downline group comes with you as well as their sales volume which combined is called group volume. With most breakaways there is a set/defined personal group volume that has to be met each month in order to qualify for commissions on other breakaways. There is also a personal sales volume requirement that you as an individual have to do each month.
When someone you personally sponsored in your personal group qualifies as you did to breakaway, they officially breakaway from your personal group and take both distributors and volume that are underneath them from you. They are now considered one of your first generation breakaway groups and you will earn on a monthly commission on this entire group by meeting plan's monthly defined personal group sales volume requirement. With most breakaway plans, more first generation breakaway groups you have more generations deep of breakaways you will qualify to be paid on. Keep in mind that what makes a breakaway more of a full-time work program is that you have to constantly meet your monthly personal group sales volume in order to be paid commissions on your generational breakaways. However, if goal is to have as many first generation breakaways as you can, you will continuously be losing distributors (as they breakaway) in your personal group whose volume will have to be made up in order for you to meet monthly group volume requirement. This means lots and lots of recruiting for new distributors.