Attraction Based Networking

If I had a dollar for every time someone asked me "Is this one of those pyramid schemes?", I could probably quit my Network Marketing business and retire. 

The unfortunate stigma that is still slightly attached to our industry, however, is the few bad apples that spoiled a good thing.  It is not as prevalant today as it was, say, 10 years ago, but the question still comes up and needs addressed if you are to be successful in your business.

So what are some determining factors in separating an illegal pyramid scheme from a legitimate Network Marketing Opportunity?

1)  The sales of services or products to the ultimate users.

To understand this you need to understand what is considered an ultimate user.  The ultimate user can be anyone in your downline (distributors) or your product customers.  This does not mean only sales to product customers outside of your organization.  Anyone within your organization that you sell product to is considered an ultimate user.  When the product is getting to an end -consumer (in this instance that would be either distributors or customers), then it is legit.

What would send up a red flag would be if you are asked to purchase a large quantity of a product that ends up getting stored in your basement with no intention of getting it to the end consumer.  Beware if a company requires you to purchase thousands of dollars worth of a product up front.  Just be sure that you are not being "Front-Loaded" with this product with no intent of moving it to the end consumer.   This could be a sign of an illegal pyramid scheme.

Today, most companies have "drop ship" orders which consumers can order directly from a website so there is no need to store any inventory.  Personally, this is my choice when looking for a company but it can be legit either way.

Just use your common sense.

2)  Commissions are paid on product usage - (sales volume) - not recruiting.

This does not mean you should not be recruiting in your Network Marketing Business.  Quite the opposite.  Recruiting is essential for success.  Some recruit more than sell and some sell more than recruit.  Either way is fine because Network Marketing is about leveraging people within your organization.  That is the bread of butter of Network Marketing. 

What this means is simply that your income must come as bonuses and overrides based on the sales volume produced by your organization.  If you are paid only for recruiting, the number of distributor kits you purchase or the training materials - then beware.  It might very well be a sign of trouble.

3)  Companies pushing sub-standard or overpriced products.

Mailing list clubs come to mind immediately.  These are chain letters and have no basis whatsoever in Network Marketing.   The product or service must be a legitimate one that people would buy at retail on the open market. 

If your product or service is something that no one would even think of buying at retail or without participating in the comp plan; then red flag it.  It could be a pyramid.

There are many other signs to look for when checking out an opportunity. 

There are thousands of quality, up-front Network Marketing Companies out there.  In fact, direct selling is booming right now and is a very accepted business model for the 21st Century.

Just like anything, you need to do your homework first.  There are always people out there trying to scam you and Network Marketing is no different.

Look for good signs - are they a member of the DSA? If not, how long have they been in business?  What are their products?  Are they reputable?  Who is their leadership and what type of system do they have?

Ask questions, research and you will find what you are looking for in the way of a great opportunity.

There has never been a better time than now to be in Network Marketing.  If you find the right company and work hard, you can have success beyond what you ever imagined.

Utilize the tools available today, both on the internet with Attraction Marketing and the old fashioned methods of working your warm market. 

To summarize - how do you know if you are looking at a great, legitimate opportunity and not an illegal pyramid scheme?

DO YOUR HOMEWORK.  Education is key.  I always emphasize that.

NEVER stop educating yourself in this business.

For some great information on Network Marketing and to subscribe to his free newsletter, visit Network Marketing Times by Randy Gage.   

Once you find what you are looking for, take the plunge.  This industry is exploding so get on board now while the train is still moving forward and be part of the revolution. 

Probably one of the most important decisions you will make in your Network Marketing career is choosing which company you will work with.  Most people don't realize this and join the first opportunity that is presented to them.

That works, if, and that is a big if, the person presenting the opportunity to you is someone you know and trust to be committed to working with you and helping you succeed.  If you are lucky enough to have this type of opportunity presented to you, then you could save a lot of time researching every other network marketing company out there and more time starting to make money. 

However, you need to ask yourself several questions before joining any company, whether or not you know your upline personally.

The first and most important question is this:

1 - Would you buy or use the product or service that the company is offering?

2.- Would you be willing to pay the price for which those products are offered at retail?

Let's examine both scenarios in a little more depth:

1)  One of the first questions most customers ask is do you use the products and are they any good?  If you don't use the products and would never plan to, then how can you possibly expect other people to purchase them?  Would you dine at a restaurant where the chef didn't eat his own food?  Probably not.  So keep the same line of thinking when you are looking at a network marketing opportunity.  If your answer to this question is no, then you need to keep looking.  You will never be successful if you cannot get beyond this first question.

2) Would you be willing to reach in your wallet and shell out the $$$ for those products at RETAIL? (Notice, I emphasize retail here because most distributors or consultants are able to purchase at wholesale or at a hefty discounted price).  But your customers will be paying retail and you need to compare apples to apples here.  Once again, if the answer to this question is no, then you need to move on.

Your success in any MLM is based upon these 2 principles first.  If you fail at either one, you will fail at your business. 

Are you products consumable?  In other words, will they likely be a product that will be reordered time and time again.  (Customers on auto-ship can create a great retail income for you and a solid foundation of volume to help you meet your company's active requirements). 

Can these products be purchased easily elsewhere for less money?  Is there anything unique or exclusive about what this company offers?  In Network Marketing the actual buzz word for this is "USP" or Unique Selling Proposition.  But uniqueness is what will help your company stand out above the others out there and make it a little easier to be successful.

Your passion for your services or products is what will drive you to success.  Without this, you really have an empty shell.  Donald Trump once said that if you do something you love, you will be successful.  The same holds true for Network Marketing.  If you do not believe in the basic premise of your opportunity (the products or service), then you lost coming out of the gate and are doomed to fail. 

There are many other factors you need to consider when researching an opportunity.  Do your homework and take your time.  If you don't feel it is right, then it probably isn't.  You don't want to be forced to purchase products just to try and get a check every month.  

Start with the product line or service and if it clicks, then chances are good you could be successful.

There has never been a better time to join a Network Marketing Company.  The internet offers a wealth of opportunities right now to market your products and opportunity using the model of  Attraction Marketing.  Once you have found a company that you truly believe in, you can start to build it using these methods to grow your business and build a lifetime of residual income.

Update on Wednesday, July 16, 2008 at 09:06PM by Anita Kulik

Network Marketing - 3 Things to Consider When Researching an Opportunity

1. The economy - we need a Plan B - a residual income. With the state of the economy and the impending recession, there is no better time than now to join a Network Marketing Company. You can start most companies for small start up costs compared to your own business or franchise which could run you tens of thousands of dollars. You can build your business alongside your daytime job at your own pace. In the meantime, you are earning an additional income as a security blanket in the event you would lose your job or just as supplemental income to help defray the escalating cost of living.

2. Timing - it is ripe for Network Marketing. Network Marketing has become an accepted business model and it has been predicted that it will create more millionaires in the next 10 years than any other industry. Those statistics are staggering. It has a lot of momentum right now. Where will you be in 10 years with your job? And, coupled with the new model of Internet Attraction Marketing, there has never been a better time to advertise or network using the internet. It is all coming together now and I believe it is just the tip of the iceberg.

3. Freedom - Do you really have it now? This is one of the few industries that allows you to grow it as fast as you want or as slowly as you want. Your earning power is up to you. You can choose to earn a little or a lot - it is really in your hands.

Everybody doesn’t have to be a race horse. There are lots of pack horses. If it takes you 10 more years to make an extra $1,000/month that’s o.k. because this could be your retirement plan. You could use it as extra income for retirement or it could be your retirement. What about social security? Never depend on government programs for your future. If you leave it in someone else's hands, then you lose control of your future and your income .

Ask yourself these 2 questions when deciding whether Network Marketing is right for you.

If you were able to work really hard for a handful of years and build a residual income for the rest of your life, would you want to?

Wherever you are right now - will you be able to pass that income along to your family?

Make an informed decision before ever deciding to join any company. But if some of the reasons here hit home for you and you have the same concerns that most people do in this economy, then looking at possible alternatives is a start to securing your future. Network Marketing is finally coming into its own. You owe it to yourself to do some research and see if this might be a way to secure a recession proof income for you in your retirement years.