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The truth behind network marketing

03/31/08

Posted under network marketing

dominoes

When a friend or a cousin you haven’t heard from for so long suddenly calls you at the office and invites you to a “business opportunity” meeting, do you:

a) bump off your scheduled meeting in her favor?
b) think of an excuse not to go?
c) tell her to bug off?

Our personal finance feature today from MoneySense says there are around two million Filipinos currently in the network marketing business, based on figures from the Direct Selling Association of the Philippines.

There are several variants in this business – network marketing, direct selling, and multi-level marketing. Due to unscrupulous practices of many companies in this business, there is a lot of confusion on whether network marketing is a scam or not.

I have personally seen several friends and acquaintances make good, legitimate money from this kind of business. But whatever you do, when talks of checks and commissions come in, don’t be led into thinking that network marketing can make everybody rich — quickly.

The truth is that network marketing is a good model for removing the middle man and distributing what he earns among consumers. But it is NOT for everybody. And the sad truth is that if you are not careful, you can fall for a lot of cons in this business. So, choose carefully.

The article gives some tips for those who are considering of getting into network marketing. Here’s an excerpt:

1. Figure out if you fit the profile
There are probably millions more who have tried their hand at the MLM business at one time or another. Not many succeed, usually dropping after a few months. It may be easy to join but it’s certainly difficult to stay for long. You need to have a certain mindset to succeed in network marketing. “

2. Choose the right company
Investigate the company. It should have a long and proven track record in the industry it operates. Companies like Avon, Triumph, Tupperware, and NuSkin have been in the industry for years and have been providing people with good products as well as good income for its distributors.

3. See if you like the products
The most successful network marketers are those who truly believe in the products they are selling. It certainly makes it easy to persuade other people if you love to use the products yourself.

4. Make sure you earn not mainly from recruiting
One, the company should have a product. Scams like FrancSwiss offer huge interest for your investment and yet they don’t have a product. Two, the product should be unique and is exclusively made by the company. If not, then most likely, the business is being run from joining fees.





12 Feedbacks on "The truth behind network marketing"



Azrael

I once gave a contact a shot once the person claimed that my number was pulled from our college placement office to work part-time (I have a full-time job already) to “help a multinational start up in this country”, thinking I’d learn a few things. On the day of the briefing I received a text message saying that I should prepare myself for the briefing by “Thinking of ways to earn P40,000 without using my own money for capital.”

Lo and behold, the “briefing” was for network marketing, which resulted in immediate loss of confidence with how our personal information is being used by the school. And second, WHAT A LIE: what was that about thinking of ways of not spending our own money (which I’ve done for charity concerts and the like), when there’s a “starter kit” worth P12,000?!



Salve

hi azrael, i know what you mean. personally, i have high regard for those who are upfront from the very beginning about what kind of “meeting” the invitation is for. when the invitation is veiled in some kind of language, it just sets the stage for disappointment and distrust, don’t you think? and by the way, have you complained to the school?



Indian direct selling advisors

yes . this is exactly the practice followed by almost all of the direct selling companies in india too cause of its misunderstood nature.
this can be sorted out once the representatives in the govt. from the relevent departments sit across the same platform and understand the logic behind the channel and the need for regulating this industry .
once the regulatory body is formed the understanding of this industry among the common people will be easier and this type of misadventures will be controlled.
We in india are putting in strategies together to get the govt. officials on a same platform for this direct selling industry .
more on http://www.strategyindia.com



Don

Well azrael, it only shows how close minded you are and how negative you are to network marketing (legitimate)companies. You see, the person who made the article here must be very open minded and he really knows what he is saying about the topic. No offense but you gotta have to listen what you are saying. Your being negative to network marketing already brought you to a decision not to do the business. Your reaction was not different to the reaction of the people who criticizes Franchising during the industrial age. Franchising was a new trend of doing business back then but federal agents and some people like you were going against franchising business. Back then franchising was not acceptable my majority. Now here comes a new trend of business (which is network marketing) and people are screaming that the business is not acceptable to the society. Taboo!! All taboos will always be accepted in the long run. That has been the case ever since. The article says we need to investigate about the company. It’s just plainly doing business. Most of the people react negatively to network marketing company but they never know about what’s a real business. You were invited to look at the business and they called you in a professional way and they showed you the presentation about the business in a professional way you arrived at a decision with just very small information stored in your brain. Isn’t it unfair to you and to the person who invited you to arrive at a decision with just small information? Will you say yes to a marriage contract with just very few information about the person whom you’ll be getting married with? Of course the first step is you must KNOW! Read a lot of books about network marketing, look at the positive side, look for people who became successful with doing the business, check if the poeple who became successful gave money to charities and ask if they have helped a lot of people become successful. Why would you ask the people who never became successful doing legitimate network marketing? The reason why they didn’t become successful is becaue they quit. The same is through with any kind of business. The reason why some of the businesses fail is because the people within a certain business quit. Plain and simple. The reason why some of the successful people like Bill Gates, Robert Kiyosaki, Henry Ford, became wealthy because they had the mindset of being always a winner. A quitter/looser complains a lot of things in life. While a winner thinks big and always do what is above and beyond.



cynch

Network marketing is still a new concept for most people even though it has been around for years. I think this is where business trend is going to. It’s like the same situation on “Franchising” in the 70’s. It was not widely accepted then, but now look at the establishments around you, almost all of them were franchised. I guess they just need to refine the standards or procedures to determine if a business with Network Marketing model is legitimate or not. It should really be differentiated from a pyramid scam. I have been to lots of network marketing orientations, but have only joined one of those companies. I have also experienced being duped by a person telling me that it’s for like a job interview and when you get there it’s a network marketing orientation. I hated that person and I dont want to do that to other people. So when I invite people I tell them about the product I’m selling and that the orientation he/she is going to is about network marketing. I’d rather talk to people who are open-minded than waste my time convincing people who do not want to know about this kind of business. For people who do not understand network marketing, I just think to myself “it’s their loss”



Alex

I agree with the four points this article makes, except for the fact that focusing on recruiting is a bad thing. While it’s true that there needs to be a product or multiple products involved and sales should be happening, there are many successful, legal mlm companies whose compensation plans reward you very well for sponsoring other distributors more than they do for the sale of products to outside customers.



maffrey

I just want to share my experience with network marketing.

I have a college friend who invited me “to go out”. I had this feeling that she’d take me to a network marketing “briefing” because I haven’t heard from her for a while then all of a sudden she texted me and asked me to go out, her message was very inviting. I made her tell me the real score and she admitted she will take me to their office in Ortigas for the said briefing. Reluctantly, I said ok. I have nothing to do that day and I was actually looking and searching for the right business to invest with my hard-earned money so I thought of giving it a shot. Their products were bags, shoes and accessories-stuffs that women love. The speaker showed us how quick a starter kit worth P8900 will earn miliion of pesos in 1 or 2 years time. You just have to recruit 2 downlines and presto, you can sit back and relax and have your downlines work for you and make you a millionaire. I was contemplating their feasibility study and the products that they have and I thought I need more time to think about joining. But as I went down the building after the briefing, I was surrounded by the networkers convincing me to join them. They showed me the cars that the networkers were able to buy in a matter of 6 months after joining the said networking and told me that this business is very easy to do, won’t consume much of my time, will make my money triple or more after a few months time and so on and so forth. I said I have to think about it first. That night at home, my friend kept on texting me and convincing me to join. The next day, she kept on pestering me and finally, I thought, why not give it a try. Then she started arguing me into buying 3 starter kits equivalent to 3 heads. She said it is worth it, she herself bought 3 heads and she’s receiving cheques every month. More heads, more profit. 3 heads means P26,700. I was thinking to myself it is a big amount, but then I gave in. I thought it was easy because they made it look easy. I thought it won’t consume much of my time. But I was wrong. During the daytime, I was trying to sell bags, and shoes and accessories, and contacting as many friends as I can to invite for the briefing. In the evening, I will pick-up my invitees and bring them to the briefing and convince them, convince them more and convince them more. After months of trying, I quitted. First, I couldn’t sell their products because their price is much much higher than those of the malls even if I cut 40% of the original price (networkers were entitled to 50% discount) and only 10% left for me as profit. I even asked my mom and sisters to sell to their friends then I’ll just give them commission. Sad to say, kami-kami lang din ang nagtry ng products na binebenta ko at puro panlalait pa ang napala ko dahil hindi naman kagandahan ang products, ang mahal-mahal ng presyo. Second, it really wasn’t easy convincing people. Most of the people I invited didn’t have savings so how can they join if they don’t have capital? Some of them have but P8900 is P8900 and they didn’t want to gamble it to something they’re not sure of. Networkers were persuading them to loan or to sell what they have (i.e. cellphone) to be able to buy starter kit, they were telling them it is worth it. But my friends didn’t buy it. Third, I’m spending so much time and money but I’m not gaining anything. I grew tired and frustrated. So there you go, bye bye P26,700. I actually lose more than that amount.

Networking isn’t for me. I guess if you are a sales person, then this business is for you.



don2x

networking using the pyramid model is just a fad. like fashion it has a life cycle. the rewards are very attractive for all if only there is an endless number of downlines. but for metro manila with only 8M people, just less than 10% who are at the top will benefit.as there are no more downlines to continue the networking, the pyramid collapses.



inia

actually, there’s already “network marketing” course in Harvard University.. Guys, many of the top leading school in the world already have that kind of course..

People are really judgmental when it comes to network markting where in fact network marketing is a good business if you r just have a patience..

to maffrey, i just want to correct u..network marketing is for everybody…basing on ur write up u said that u should first know the company and u didn’t..right? and u also bought 3 heads because of what your friend says…and u quit because u lost a lot of money..here’s a tip..

to all, before u join the company u must:
1.) know the company.
2.) know the products. and make it sure its useful or saleable/indemand to the society..to make it sure u can survey from the consumers!

there are already a lot of network marketing arises in our country, u just choose what company u want to join..and be sure u really want to join and have patience..



Oscar Manansala

Firstly, make sure you hook up with a company that has solid track record. Secondly, make sure that the services (preferred over products) are needed not just wanted by people and their prices are cheaper than what’s out there. Finally, don’t just desire the earnings of those successful networkers but put in the same amount of work they did. Good luck!



Aspiring Entrepreneur

I had an interview session posted in my blog with the top networker in an MLM company. He shares his views with his success and other experiences.



Kurt Henninger

Absolutely. There is nothing easy or quick about it. Network Marketing is just like any other business and takes work from you in order to succeed.



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