Common objections to Network Marketing
The person at the top makes all the money
That sounds like traditional or corporate business. The Chief Executive earns more than the board of Directors, who earn more than departmental managers, who earn more than the supervisors… all the way down to the caretaker. What are the chances of the caretaker earning more than the CEO? In modern network marketing pay plans or "compensation plans" distributors have to build two or more teams and are paid on a "balance" across their business. This means that the ONLY way for a distributor to succeed is to help the members of his or her team to succeed. It is therefore possible for a member to earn more money than the person that introduced them and more than people seemingly far higher up in the network. Network marketing is a meritocracy. Those that work the hardest and help others to achieve will earn the most.
Everything is unconventional until it is widely understood. Several decades ago franchising was seen as unconventional. Today it is accepted as being a legitimate and successful business model. McDonalds, Starbucks, Cash Generator & Prontaprint are household names. Of course, there are good and bad franchises.
The majority of new business startups fail in the first two years. The majority of those that survive the first two years fail in the first 5. Not everybody is successful and those that fail in network marketing tend to blame everything but themselves. Due to the generally low cost involved in getting started in network marketing the risk is very low. However, the low cost is also an Achilles heel because it may lead to the business not being taken seriously.
Ask a group of business owners what is there most effective form of marketing and the majority will answer "word of mouth". However, billions of pounds are spent on advertising in all its forms every year. This advertising is paid for from the sale of products… at inflated prices. It was reported in the Daily Telegraph that Richard Hammond (of Top Gear fame) was paid a staggering £750,000 for the Morrisons advertising campaign in 2008, and he wasn't the only celebrity they used! Network Marketing companies do not generally spend any money on advertising. Instead they pay their independent distributors commissions for spreading "word of mouth". Therefore, their products need to be of a very high standard so that people believe in them and are happy to recommend them to their contacts.
Richard Branson, Donald Trump, Warren Buffet, Robert Kiyosaki all either currently use or have used network marketing in their businesses. In fact Robert Kiyosaki's latest book "The Business of the 21st Century" is all about the network marketing industry and what it offers individuals in terms of income and personal growth.
As with starting any business there is a risk. Fortunately in network marketing the startup costs and overhead is generally very low and therefore the size of the risk is minimal.
This is the risk that the company may shut up shop or change their business model. It is therefore important to align yourself with a business that has the right culture, experience and attitude. It is important to do your research into who is running the business. What are their backgrounds, history etc. If the company is relatively new, how established are they, what is their turnover year on year. However, if they have been established for many years the biggest phase of growth, momentum, may have already been and gone.
In the current economic climate what control do business owners have over the banks recalling financing?
There are good coffee shops, bad coffee shops, good accountants, bad accountants, good cops, bad cops. Need I say more?
This is easily overcome by having good marketing tools and a good presentation. These will be professionally produced by the company.
As previously mentioned, the product has to be of high quality otherwise distributors would not recommend it.
This could well be the case. You need an industry that is growing a product that is consumed or paid for time and time again and a company with vision. What is the size of the industry and how much market share would the company need to become a sizeable business.
Some of the world's greatest ideas have been the most obvious, most simple ideas. We hear of them and then kick ourselves for not thinking of them first. The motto of many a business is "keep it simple" and yet when offered a simple effective business model the same people reject it.
Carry out your own research. How long has the company been established. What is the turnover year on year, who are the leaders on the corporate side.
Generally you can spot a get rich quick scheme. It's all about the money and very little mention of the company, product, training and support.
Research! What is the company's vision? How consumable is the product. How big is the industry that they operate in and how are they innovating in that industry.
...then this business and indeed any business is probably not for you. Success generally requires a positive and pro-active nature
…and people don't want to be sold to. A good network marketer will invite people to take a look at their product/opportunity and help their contact to make an informed decision.
We recommend all sorts of things to our friends and family all of the time: films, restaurants, gadgets, websites. Word of mouth is the most powerful form of advertising. If the distributor has belief in their product, their company and the business potential then they will be offering their friends and family a way to work from home, add an additional income into their lives and even the potential for life changing personal development and income. Why on earth would anyone keep that from their friends and family?
One of the best explanations of the network marketing industry that I have heard comes from Tim Sales, an ex US Navy bomb disposal expert and successful network marketer. To hear Tim's explanation please
CLICK HERE
CLICK HERE
Great summary of responses to people's questions. Clear, simple, and not objectionable. Thanks Jon.
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