Let me, first mention
history of MLM/networking industry. Networking was founded on principles of great products and sharing of such. In fact, oldest direct sales company in America is now a network marketing company based on sales of products and sharing concept of retailing products to make money, but through a strategy of networking in order to find others who will do same.The answer to "Which Comes First" question really rests with business opportunity seeker based on how he wants to build his business. What I am about to share with you may help you determine kind of networking company you may want to align yourself with.
Let me start by saying "the face of network marketing industry has changed drastically in past 15 years." With emergence of computer technology, network marketing has taken on a new look in terms of what is on "front door" as you come knocking. With introduction of Internet as an additional medium for networking, whole MLM industry has seen a new emphasis.
PRODUCTS, PRODUCTS, PRODUCTS!
Just to give you an idea what I am talking about, 20 years ago a prospective sponsor would sit down across kitchen table with you . .pull out his catalog of products ... show you some sample products or may even have a small home meeting demonstrating excellence of their product line and then tell you how you can make money, not only selling products, but having a distributorship. In so doing, you could set other people up with a distributorship which would allow you to retail products AND earn commissions from products sold by your distributors you signed up under you. In other words, they led with products first. There are companies that continue to use that approach today and with certain companies, that is a necessary approach to take and certainly makes sense.
HOW ABOUT A BUSINESS OPPORTUNITY?
In eighties we started seeing an emergence of "business opportunity" in headlines as a way to attract people to MLM. This emergence led to a new approach in network marketing ...
"Mail Order." No longer was it necessary to have local meetings or to meet across kitchen table with people. Simply send out a mail piece and sign people up. Companies had ability to manage databases of people and to run commission checks so "business opportunity" became lead-in rather than products. Although these type companies were backed up by products, emphasis on products was not same for some companies . . . and in fact . . .brought on certain companies that were "here today and gone tomorrow" because products were not good enough to keep people involved. Remember, it’s sale of products that generate commissions for distributors.
LET’S MAKE SOME MONEY!
In early nineties, personal computer became so popular that it was possible for "John Doe" to start up his own program . . .right from his own kitchen table. With this came on "Make Money" approach to MLM. Many times word "business" was not even mentioned. It was about making money regardless of products and in some cases illegal MLM schemes were developed with intention of going out of business at some point . . .even being put out of business due to attorney general probes or postal regulations. It was this phase of MLM that started giving MLM a questionable name because good, bad, ugly were all grouped under MLM . .even if they were illegal pyramid schemes or ponzi schemes.
At this point, I might add that there were still legitimate product oriented MLM companies continuing to prod along just as they have been doing for years, but due to hype of "make money" people were being lured toward these "make money" type companies. So what began to happen was truly product oriented MLM companies began having competition from short lived "make money" type programs.
LET’S MAKE MONEY, AND I'LL DO IT FOR YOU!
Something else happened at this time as well. The "Make Money" programs hyped "don’t work hard" image and in some cases . . "we’ll do it for you." Let’s face it. If people could make money without working very hard . . either due to their not having time or their just not wanting to work hard . ..certainly people would jump on bandwagon of "make money" type companies over slower to build product oriented companies and that is exactly what happened. The result was, many people getting a bad impression of MLM due to a company going out of business or due to lack of focus on what company had to offer other than just making money. This is why you will see ads that say "this is not MLM" because they know many people have been hurt in "not so legitimate" companies. Unfortunately it takes only a few bad experiences and negative publicity to give whole industry a black eye.
MAKE MONEY . . . FAST!!
Well, if that wasn't bad enough, Internet emerged and it was no longer just "make money." Now it was "Make Money FAST!" It was no longer good enough to just make money. You had to make it fast . . . you know . . . like $90,000 in three months or become a millionaire in six months! In addition to that, Internet began to attract another kind of person . . .the person who could barely afford his monthly ISP service, but accessed Internet in hope of getting his share of Internet Gold. Along came people who not only could not afford products to buy, they could not afford cost of adequately marketing their business in a way to build a solid foundation for that business. The result has been a majority of business seekers who join one program today to "Make Money FAST" . . find they didn't make it fast so they jumped to next company and so on. These "jumpers" are spending $50 here and $50 there, but they are not spending what is necessary to build a solid business . . time, energy, focus and persistence. Now I realize I just made a generalization and realize not everyone does this, but I have personally noticed a tremendous number of people who basically can't afford even products to build their business. In other words, there is no such thing as product loyalty because people often times join a company or program based only on dream and hype of making fast money. So . .why do they get involved? Because we tell them they can make money FAST and it’s easy! In order to compete, networkers have had to learn how to hype and this hype has led to disillusionment and disappointment, especially to new networker who has no idea what it really takes to build a long-term successful business.
THE GOOD NEWS!
The good news is, there have been some legitimate networking companies that have come on scene that have taken network marketing a step further. It is new age of networking and leaves behind days of stocking products, going door to door and emphasizing retailing of products. This new approach is called "Referral Marketing." It is now possible for a distributor to simply refer customers and other "distributors to be" directly to company with sponsor getting credit for any products sold from that direct referral. The question is still about do we lead with products first or opportunity first, but with referral marketing, one can very easily lead with either one.
