Monday, April 16, 2007

Network Marketers - Do They Stand A Chance?

Network marketing companies are popping up all over the place. Most of which are not able to sustain themselves for long-term success. There's a large disproportion in the number of newly launched companies and the number of people joining these companies.

There are still many "old fashioned" network marketing companies out there. If you work with this style of marketing, this means you've been trained to make a list, invite friends and family to a presentation, present the business, follow-up, and get the commitment. The problem with this marketing model is that it's been around for such a long time, people see it coming a mile away. Since most people have either been in a network marketing company or know someone who has, a HUGE red flag goes up immediately and the skepticism begins before you've even presented the business. Therefore, if you are using this method, you'll likely face a lot of rejection.

In addition, people are trained the worst possible marketing and advertising strategies known to man. You're trained to present your business and attempt to sign people up who have never expressed any interest in starting a home business. It's like your trying to ice skate uphill, and your blades are dull!

If you're ambitious and after facing rejection and failure offline, you'll turn to the internet. You'll possibly purchase leads and attempt to operate your "old style" company with a "new style" marketing strategy. However, buying quality leads is extremely tough because you'll have to find a credible lead source that you can trust without emptying your pocketbook. And good leads can range from $3.00 - $10.00 a piece. If you're leads cost less than $1.25, it's very likely your leads have been sold numerous times over.

So, you can generate your own leads. If you're marketing online, this is the BEST method of operating because the people looking at your business are people who are seeking out your business. However, if you don't have the internet marketing skills needed in today's VERY competitive environment, you can blow a wad of cash quickly!

How about getting involved in an internet based network marketing company. A company that'll provide you with some great tools to automate your business and make your life much easier such as lead capture pages, a flashy movie, etc. It won't help, and here's why:

In order to make money on the internet, you'll have to generate 'targeted' traffic to your website. You'll do this by advertising and as you know, advertising costs money. Therefore, you'll have to understand how much it is going to cost you to get a sale.

Most network marketing companies will pay you some form of quick start bonus that will range from $5 - $100 (if your company is generous). And then you'll receive some residual on the vitamin auto-ship or whatever your products may be. However, it may cost you anywhere from $50 - $350 to get someone to join your organization. And here's where the true problem lies. Even though you're generating targeted traffic and you're getting some activity, it is highly probable that it'll cost you more money to get the sale than you'll actually make from the sale!

If you budget $500 per month in advertising, get 10 people to join your business, and receive a $50 quick start bonus and $2 month residual per customer, your just breaking even.

Is it really worth it?

Well, some people will tell you to sell a retail product up front and capture leads through your lead capture and retail sales to fund your advertising. This is the preferred method by savvy marketers.

A great retail product designed for network marketers is Or, you could consider getting your hands on some products with resell rights. Intensive recruiting also offers a very discounted package with full resale and private label rights with ready made sales pages at

Even with those tools, people are quickly realizing that network marketing on the internet is not everything it was cracked up to be. What once was considered to be a match made in heaven has quickly turned sour for many network marketers.

Since advertising has become so expensive and competitive, compensation plans have not evolved enough to change with the internet environment and consider advertising expenses. Therefore it will not work for most people long-term.

If you're looking to make your life and fortune on the internet, I would recommend a direct sales style of business and pay structure. I say this because in direct sales, you'll receive a much greater commission up front. Anywhere from 50%-100% and in many cases you get the money at the point of sale. Therefore, you'll receive cash throughout the month to fund your advertising, and the commission is typically much greater than the cost to get the sale.

Money today is worth more than money tomorrow. This business model was made for the internet and will work for anyone who is willing to learn how to market on the internet.

No comments: