Four Truths about Network Marketing: Part One
In these next four posts I am going to cover 4 truths about network marketing that EVERYONE needs to understand and consider before they ever sign-up with a network marketing company. The first is simply:
The Truth about Costs
This is where it all begins. With the exception of a very few companies, you simply can’t join a network marketing company without investing some money up front. This investment can be as low as $4.95 or as high as several thousand dollars. Each investment level promises the world of training and help from your upline (“upline sponsor.”)
One typically thinks that once enrolled then a business model and system is shared and all that is required is implementation. But this is not the complete truth. Once enrolled you must buy a required amount of product in order to be qualified for commissions. The company will never allow you to merely purchase a product or two unless those products possess the required monthly PV (point value). Often the required monthly PV costs over $100 per month (or MUCH more). It depends on the company and the product. This is understandable because if you are going to recruit people it is a good idea to be a consumer of the company products. If the company markets a service, then you will be required to pay the monthly fee for the service.
The PV Challenge
To get to the “good” money, you need a combined GV (group volume) that is amazingly difficult to achieve. Why is it so difficult to get people to purchase the products or services and build your GV?
- Because the products are quite expensive and
- they have to be placed on a monthly autoship program.
- Add the cost of shipping to the mix and you’re basically dead in the water.
Many companies promote the idea that their products are consumable and will need to be replaced because they are consumed each month. This keeps the revenue coming in for the company and the distributor. Some companies do not offer products but a monthly fee to be in the club. Still the idea is to get people to make a monthly payment so commissions can keep flowing. This one of the truths about network marketing.
This explains why there are so many nutritional and weight management companies out there. Vitamins and supplements are taken daily and by month’s end the products are consumed. But thanks to auto-shipping programs, about the time your product runs out your replacement package arrives via UPS just in time. Yay!
The Products and Costs
Typically the products are quite good. The problem is not with the effectiveness of the products, but with the cost. Most people can’t bring themselves to pay 3 to 4 times the cost of a nutritional supplement that they can get at Walmart or a local vitamin shop for significantly less.
I loved two products from a company. But both together cost me over $100 each month. Add another $18 for shipping and you can see why it is so hard to sell the products (let alone the business opportunity). I now but these supplements elsewhere are half the cost. So I get the same benefit at huge savings. This is why so many people leave network marketing companies… People simply will not pay so much more for products, plus shipping, when they can get something comparable for so much less.
[Bonus Tony note]: I really hope that you don’t buy your nutritional supplements from places like Walmart. There’s a reason they cost so much less. They are simply low quality products. Some things, like your health, are NOT where you want to cut corners. You don’t have to pay way too much for products from a network marketing company, but you also don’t want to pay too little. [End of Bonus Tony Note].
The Amazing Fast Track Program … uh yeh!
Another possible expense is “fast track” programs. Most network marketing companies have these programs. These are programs in which you invest a significantly higher amount when you first enroll. They are supposed to give you a huge boost toward higher commissions in just a few months and the training is supposed to be better and more advanced. Supposedly you will have more one on one interaction with the people at the top.
Here is an actual statement about how great fast track is from a well-known company:
“… you can earn extra bonuses and rewards by reaching certain Business Leader ranks in a specified FastTRACK time frame, starting with Director. This is a lucrative program that can help you earn up to $34,000 in a 15-month period. Factoring in other income sources, those who achieve all FastTRACK bonuses can earn in total up to $100,000 in a 15-month period! And there’s more! You also have the opportunity to earn an additional $50,000, independent of other income sources, for taking FastTRACK to the Key and Master Coordinator ranks within specified time frames. It’s truly a FAST TRACK!”
Don’t buy this hype. It is just another way to take your money and put it in the pockets of your sponsor. The work is the same, the training is meaningless, and the advancement is minimal. Again, the fast track testimonials from people who went from zero to hero lack significant details that they purposely don’t share (more about that in the next post).
Fast track programs are simply a bad idea for someone with no experience with network marketing. Again, if you want to try your hand at a business, fine. Simply start at the entry level and see if there is a fit. My guess is that you will struggle to recruit distributors or sell products. But you may be one of those rare exceptions that indeed make some good money. Just don’t waste hundreds of dollars upgrading to fast track (or whatever name the company uses) until you know it will be worth the investment.
Bottom Line: Truths about Network Marketing
In network marketing the average person spends far more than they ever earn. Also remember this. By law companies most publish income disclaimers so that potential recruits can see how much the average person earns with the company. These reveal the sad truth. Make sure you view them for every company you consider. If a company does not have an income disclaimer on their website or available in some capacity, they are breaking the law.
To read Part Two of the Series go to: https://morningcoffeecommute.com/truths-about-network-marketing-testimonials
I hope this has been informative and helpful. To see what is now working for me go here: https://morningcoffeecommute.com/wealthy-affiliate-review
Tony Guthrie (email@example.com)
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