The Basics of Starting Your Own Network Marketing Business

For starters, you may also hear network marketing referred to as MLM, or multi-level marketing.  If you’re wondering about the 90% failure rate in network marketing, it is true.  In fact, the same odds are against any business starting up, within the first five years of operation.  However, if you can gain the right knowledge and apply it to your pursuits, you’ll find that a network marketing career is highly rewarding. 

When looking for a network marketing business, there are certain aspects to pay attention to that will help you avoid working in circles and going nowhere.  One is the cost involved.  You should not be required to pay a large sign-up fee or to purchase huge inventory lots to receive your compensation.  Steer clear of companies that require such things.  You should have an opportunity to start your business with little cost.

Another thing to watch out for is a claim to make money without selling.  There is a method that’s referred to as spillover, but don’t expect to get rich this way.  You are likely to be disappointed if you go into it with this mindset.  Spillover happens when you can get people under you with little or no effort if your upline does a lot of work and the compensation model is a forced matrix or power leg binary.  The biggest red flag is a company that has no product or service to sell, other than a business opportunity.  The best advice is to always check into any company before getting involved.  Use the search engines to find any complaints or scam warnings.

The basis of network marketing is sales and distribution.  Basically, you use the company’s product or service and suggest it to others.  A hard sell is not a requirement for success.  It’s about the referral and soft sell.  If the product or service is something that you believe in, it will help your business tremendously.  You’ll find it easy to talk about what you like about it and what a difference it’s made in your life.  To help aid the recruitment process, the company will provide promotional materials such as brochures, recruiting calls, websites, magazines and many others.  They are designed to focus on the benefits of the product as well as include testimonials.

So, as you are selling the product or service for the company, you are also keeping an eye out for people who have an interest in doing what you do, earning money off of the sales.  Essentially, you are building a team, which is truly what MLM is all about.  As soon as you recruit someone, and they begin selling for the company as a distributor, you will get paid for their sales in addition to your own.  This creates another level.  The levels continue as your team members recruit others to be a part of the company.  Again, you will also get paid for their sales as well.

There are a number of different payment plans including:  binary, breakaway, matrix, stair-step and unilevel.  Unilevel is the most preferred method because there isn’t a limit on how many people you can have under you at the first level.  You will always receive the most commission from your first level.  However, your second level purchases can accumulate to create large amounts due to the number of sales alone.  These are referred to as leveraged earnings, which is a good way to earn a very satisfying income.

Make sure the company has a product that people want or a service that interests others.  It’s also at an advantage if the product is unique and made by the company itself.  If your service or product continues on a monthly basis, you’ll have the benefit of recurring purchases each month.  This will create an ongoing income, also known as a residual income, which is what makes network marketing different from direct marketing.  With network marketing you will have an income coming in even when you’re not ‘working’.  This is a good way to establish a retirement income.  But, make sure that the company you choose has been in business for longer than five years and is free of debt. 

Once you find a reputable and stable company, you’ll want to present the product as well as the business opportunity to as many people as you can.  Start with your warm market, which is made up of people you know such as family, friends and co-workers.  Outside of that you have the option of advertisement or buying lead lists of people that have an interest in your product or service.

A really great option is what’s called a MLM Genealogy List.  It is the most targeted list available.  These lists are made up of people who have displayed an interest in network marketing by previously been involved in it.  It is not expensive to buy this type of list.  Just search for MLM Genealogy Lists.  The benefit to this list is these people already have the understanding of establishing a business.  Those are the type to look for in joining your team.