Are you thinking about starting your own home business? There are several things you should take into account when evaluating a network marketing or MLM opportunity.
Network marketing is not a get rich quick business. It is a simple business and getting involved is easy, but like any reputable home business opportunity, it requires hard work and dedication to achieve success.
When considering an opportunity in network marketing, here are some things to take into account.
How Old is the Company?
An established company is your best bet. New MLM start ups are a dime a dozen, and your level of risk is significant if you put a lot of time and money into an opportunity that hasn’t yet proven to be stable in the real world. Of course, higher risk equals greater potential reward in some cases, but for most people the risk isn’t worth it.
Be especially wary if the opportunity is new and puts heavy emphasis on the “ground floor” or “pre launch” aspect of the business. Many hyped up network marketing and MLM opportunities have gone sky high and fallen very hard in a short period of time. I’m sad to say that some people make big money by funding these start up ventures, knowing they won’t last, but also knowing that there are huge profits to be raked in during the initial launch. Scams. Be careful.
One Product or Diverse Product Line?
In general, I would be very cautious about considering an opportunity that is based around one product, especially if that product is a nutritional juice or health drink of some sort. The success rate of companies launched primarily around one nutritional product is dismal.
Note that I’m not discouraging anyone from representing nutritional products. Some of the very best nutritional supplements you can get are sold through network marketing companies. I’m just suggesting that you be very careful if an entire opportunity is based around one trendy new product that is aimed at a hot and hungry market, such as weight loss.
Product Quality and Pricing
Before you sign up, try the products and ask yourself how they compare to other products in their class. For example, if the opportunity you’re considering is based around a line of natural cleaning products, how do they compare in quality to other natural cleaning products you’ve tried? What is unique about these products that would entice people to buy them instead of a competitive product?
If the quality is there, what about the pricing? If the products are really good, you can expect that the pricing might be higher than similar, but lesser quality products in retail stores. However, it should still be reasonably in line with the market.
Recruiting and Retailing
Is all the emphasis on recruiting? If it seems that the only way to make money is to recruit, be careful.
Is it reasonably possible for people who want to make money just selling the product to do so? This is where you have to look closely. If your products have retail prices that are in line with reality, and offer at least a 25-30% discount to distributors, then you would have a reasonable chance to make money just retailing if you choose to do so.
Let’s put this in balance. In network marketing, to earn the higher levels of residual income that make this business so appealing, recruiting and sponsoring is a necessity. No way around it. The secret is to have a balanced compensation structure that provides opportunity and rewards people who want to make money selling the products, as well as those who choose to focus on sponsoring and build a downline organization.
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