Network Marketing is by far one of the more popular and effective home based businesses used for wealth building. Often referred to as Multi-Level Marketing, Network Marketing is essentially a direct sales business. A company will enlist independent distributors to build teams that will sell their products and pay them commissions for those direct sales. How much a distributer earns will depend on how large their team is and how much product volume that team moves.
Despite the statistics that say that 95% of all new network marketers fail in this business, there are still 170,000 people each week joining a home-based business like network marketing. Is Network Marketing for you? The following are seven criteria for evaluating and selecting a home based business that can assist you with your wealth building.
1. Can You Be Passionate About Their Product or Service?
The business requires you to be a sales agent of the company’s products or services, so you must be ready and willing to sing its praises. Research the quality and make sure the product or service is of exceptional value or you will always be defending the price instead of praising the value.
2. Does the Compensation Plan Allow You to Make Money?
How many ways are there to get paid in this company? Typically, there are three:
• Retail Sales – Most companies will allow distributors to purchase products at wholesale prices, sell them at retail prices and keep the profit margin. Some companies allow retail customers to purchase directly from a website and pay the distributor the profit margin.
• Recruiting Distributors – Some companies will pay a bonus for every new distributor that is enrolled. For example, some companies will pay a higher bonus if the new distributor is placed one level below and less if he/she is placed two or more levels down in the downline. You need to know how this payment plan is structured so that you know how to place distributors in your downline for maximum profit. Be wary of companies where the recruiting bonus is the focus of the compensation plan.
• Sales Volume – This is where million dollar businesses are built. Each distributor will generate business volume (BV) from its monthly BV requirement and its own sales and purchases. However, the larger amount of BV will come from the sales of its down line. Pay special attention to the structure of the matrix, as it is very important to how much money you can make.
3. Is the Compensation Plan Simple to Understand and to Explain?
Recruiting other distributors is critical to building a six figure business in network marketing. This means that you will be talking about the business and describing the compensation plan over and over. It is essential that you understand the payment plan and that you are able to reiterate that plan to all prospective distributors. If the compensation plan is so complicated that prospects cannot understand how they can make money, they will not join your business.
4. Is There a Support System Available To You?
In order to recruit distributors, you will be required to present the products and the business to many people. If you have questions, who do you turn to? Your “upline” is the team that recruited you and they should be very willing and able to assist you with any aspect of your business, especially recruiting.
5. Do the Leaders of this Company Have an Untarnished History?
The leaders of the company are key to the survivability of the business. If the leaders have a history of bankruptcy or having led other failing companies, you have the right question their ability to lead another one.
6. Is Training Easily Available and Accessible?
Some companies require you to travel for all training. Others allow you to train online. In any case, the training should be thorough for your business and easily accessible to you. Be wary of any company that charges for training. Training should not be an income stream for them if they are making money.
7. Show Me the Money
The company should have plenty of current distributors that are making money and they should have no problem showing you their checks. If a current distributor refuses to show you their checks, you can correctly assume that they are not making any money.
Network Marketing can be a very effective wealth building tool if you choose a company that will make wealth building easy for you. Don’t sign up just because you like the widget. Carefully evaluate the company and especially its compensation plan. Then, select the one that will put you on the path to wealth.