Network Marketing: A Guide to Getting Started

April 11th, 2013 by
Categories: Opportunity
Network Marketing

Network marketing is a simple way to start a home based business. Boasting low startup costs with highly flexible time and location commitments, network marketing allows you to get started on any budget and any schedule. While I don’t have decades of experience,  I found the network marketing model as I entered college and had a number of glorious failures – something of which I’m quite appreciative. Failure is often the best teacher and in order to succeed, your desire for success should be greater than your fear of failure.

It is the process of learning these hard lessons that often leaves a bad taste in the mouths of many people who would otherwise be very successful in their network marketing business. It is my hope that this two part series will help you skip over the classic newbie failures and move closer to being a successful network marketing professional. I will do this by focusing on the two areas in which people most often fail – evaluating a network marketing opportunity and managing your time for maximum efficiency. Below you will see nameless references to a few of the companies I have worked with in the past (they remain nameless because I wish to keep this series as unbiased as possible). There are hundreds of thousands of different network marketing opportunities out there, and searching for, researching, and evaluating which one is right for you is an essential process.

For those of you that are unaware, network marketing (also called multi-level marketing) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline”, and can provide multiple levels of compensation through a variety of structures.

Searching For A Network Marketing Business

Most businesses choose to promote their products through a network marketing model because they require a little bit of extra education so the consumer can understand how they are different from the competition, why they have premium pricing, or what benefits some of the more unique products will bring them. It is for this reason that the network marketing as a whole thrives from word-of-mouth marketing.

As the saying goes, “the best thing about network marketing is that anyone can do it, and the worst thing about network marketing is that anyone can do it.” In reality it is not someone’s personality or character, but rather the training system available and their availability to follow its direction. Network marketing training systems are often thought of as formal resources (videos, tapes, books, etc.), but some of the most valuable training will come from the team with whom you are working.

For the reasons listed above, your first homework assignment is to talk to your friends and family about their past experiences.  When you build a network marketing business you are in business for yourself, not by yourself. It is essential that you go into business with people that you like and you’re promoting products that you are passionate about. This will make your business more enjoyable and therefore more profitable. The more you are excited working with the people on your team and sharing the products you are promoting – the more successful you will be. If you haven’t found that yet, keep looking.

I once met an 18-year-old network marketing wizard who was driving a Bentely and making over $60,000 per month. I asked him to share his secret to success and he responded, “I don’t know, I’m just excited!” Your energy is contagious so make sure the opportunity you are getting involved with is something that truly excites you.

Questions to ask your friends and family:

  • Have you ever purchased something from a network marketing company?
  • Did you repurchase them after your initial order? Would you recommend it?
  • How did you feel about the product that you purchased? (before and after)
  • Have you ever been a part of a network marketing business?
  • What work did you do to promote your network marketing business?
  • How long were you with the company? Why did you quit?

Many network marketing businesses are marketed as “get rich quick” businesses and the amount of work involved is often under-emphasized. Many people will often have very negative opinions of network marketing businesses as they were once involved with a company and didn’t make any money after one or two months of doing no work at all. Make sure not to take any feedback as absolute and commit to doing a wide breadth of research by surveying people from different generations, industries, and social circles.

Researching A Network Marketing Company

Once you have found a network marketing company that has a team you enjoy being around and a product that excites you, it’s time to do some more focused research. Researching online is great, but I would also recommend going to their business presentations so you can talk to people in person. You should focus your research on four key areas: competition, leadership, products, and public opinion.

Competition – With network marketing being a word-of-mouth business, a good majority of the customer’s experience is based on their opinion of the person presenting them the products. With this in mind, it is still important to look at the competing network marketing companies and related products. You can do this by a simple Google search or asking your prospective sponsor. There are many areas of network marketing that are rather crowded, the nutritional industry being the primary example.

In my personal experience, I have been a distributor for three network marketing companies that promote nutritional products and (while I loved the products) there are considerable advantages to marketing  products in a less saturated market. Another consideration from my experience is that while people had amazing results with the products, I was highly limited (through a menagerie of government regulations) with how I could share their testimonials. The nutritional market is highly competitive with a lower customer retention rate, which makes for important considerations once you get to the ‘evaluation’ stage of this guide.

Leadership – This is a very important element of any network marketing company as the leadership team can quickly boom or bust an organization. In this step a healthy dose of Google searching is recommended and highly encouraged. Researching the background and experience of an organization’s leadership will help you to see if they will be capable of building a sustainable business, working within government regulations, and if they have the distributors’ best interests at heart. The longevity of a network marketing company will often be tied directly to the decisions of its leadership.

Product – The product (or service) which a network marketing company represents is an important component to research, but it can often be a less important consideration. Most of the products on the market do work to some degree and finding unbiased reviews can often be very difficult. At the end of the day one of the most important aspects to consider is how passionately you feel towards the product(s) and how they support your personal mission.

I have been a part of several network marketing companies in which (when I started) I wasn’t overly passionate about the products. What I was passionate about was how those products enabled me to help people (‘how’ I did that wasn’t really a consideration). Your passion doesn’t need to be based on ‘what’ you are promoting, but rather ‘why’ you are promoting it.

Public Opinion – This is the least important of the four elements to research about a network marketing company as it is one of the most simple to overcome. Finding unbiased opinions in this regard are not easily found online so I would recommend talking to people directly. Talk to distributors on the team, find who their customers are, and ask friends if they have ever heard of the company.

One of the most infamous network marketing companies is Amway as the tactics in which they have trained their distributors over the last thirty years have been less than reputable (ambushing people with business presentations, withholding the name of the company in a presentation, misrepresenting the income of their distributors, etc.) While you will encounter resistance in presenting any network marketing company make sure to do your due diligence so you join a reputable business.

Evaluating A Network Marketing Opportunity

Once you have identified and researched a network marketing company you will want to evaluate its viability as a business opportunity. While the above steps are in place to find a credible business that fits you it is important to evaluate if you can make money as a distributor (it’s a business after all). Evaluation should primarily focus on four key areas: products, timing, market, and support systems.

Product – While the majority of network marketing companies promote luxury items, it is  a great advantage to find an opportunity to promote something people need. Whether in a recession or after the loss of a job, it is much easier to promote a product people ‘need’ instead of something they ‘want’. The old adage of “selling ice to an eskimo” is not a position you want to put yourself in, regardless of your sales experience. Network marketing is not sales; it is sorting.

Another consideration is the diversity of the product line as (in this case) more is better. It is already difficult to change someone’s purchasing habits and it is exponentially harder to change them all at once. Remember how most of network marketing is about educating the consumer? Well with a massive catalog it can take significant time to train someone to be an avid product user. For this reason it is recommended to find an opportunity with a network marketing company that is somewhat focused.

Timing – When you are evaluating a network marketing business it can be a huge opportunity to get in early. This can often be a risk (less so if you follow the above steps), but offers even greater rewards. When you are evaluating whether to join a company based on its age make sue you also evaluate the level of risk. As most network marketing have a very low investment your greater risk will often be time, but neither element will be as traumatic as losing millions in a failed traditional business.

The Harvard Business Review classifies any network marketing business with less than 50,000 distributors “Cutting Edge” while any company with less than 100,000 distributors is classified as “Ground Floor”. Getting in early to a network marketing business promoting a product that everyone needs and no one knows about is kind of the golden goose in terms of rating an opportunity. While the opportunity of a young company is much greater the business as a whole is much more fluid and its longevity is tied directly to the decisions of the leadership. For this reason it is recommended to do additional research on the leadership team of a new network marketing company.

Market – Similar to the ‘Competition’ analysis in the ‘Research’ stage above you will want to evaluate the market of the network marketing business you are about to enter. Is this a market that will grow with time or does the opportunity have an expiration date? Are you competing with companies using a traditional business model who are spending millions of dollars on advertising? What is the differentiating factor between your product(s) and others on the market? Identifying a network marketing company that is unique, but not impossible to explain, will make your promotional efforts much more effective.

Support Systems – Regardless of what business you are planning to launch (network marketing or otherwise) you will want to rely on the skills and expertise of people who have more experience than you. Try not to fall into the mindset that you know everything, there is always more to learn. Historically, the people who have no idea what they’re doing are faster to make big checks because they follow the training exactly. A wealth of training systems, support teams, and educational tools at your disposal is a huge asset to your business. Ask a distributor if you are able to take a look at their back office and training system so you can see if it will be of use to you. Joining a team of distributors that have regular meetings to present the opportunity is a valuable asset in which you can rely.

Making A Decision & Getting Involved In Network Marketing

Go through the steps listed above and find a network marketing opportunity that is right for you. Remember not to go at it alone and ask for the advice of those around you while keeping in mind that if you buy someone’s opinion, you buy their lifestyle. Don’t take advice from grouchy people who live paycheck to paycheck and instead seek out the guidance of people who are both happy and successful.

“Network marketing isn’t a get rich quick business. It’s a get rich slow business, but that is a hell of a lot better than a get rich never business.”

With more than a decade of experience in the industry, Brian brings his network marketing background and expertise to the forefront of the CatalystMLM team. He believes that people are confined only by the walls they create for themselves and seeks to help others overcome those, and any other, obstacles that impede them from success. Brian’s mission in life is to help others build their ideal lifestyle and check every last dream off their list because you only have one life and he wants to help you make it amazing. He is a multi-level marketer, internet marketer, social strategist, coach, Apple lover, new media nerd, runner, and world traveler.

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  • Richard Brokenshire

    Hi, This is my first time on your site. I really like it! Well organized and very well written. I found you through Niche Site Duel, of all places. Talk about serendipity …

    I would add that network marketers need to learn the skills that they will need to move forward. Yes, there are skills required to run any business. Network marketing is no different. If you aren’t having much luck in the business then you probably haven’t learn the skills yet.

    • CatalystMLM

      Thank you so much for your comments Richard and welcome to the Catalyst Community :) Pat’s NSD has been a great place to connect with like-minded people who know the importance of self-education. You are absolutely correct that there are two crucial keys to success: education AND action. Either one alone will not result in long term results. Have you read Jeff Olson’s book ‘The Slight Edge’?