Network Marketing FAQ

 
 
Is Network Marketing legal?
Unless a particular country has laws that prohibit direct selling, Network Marketing is perfectly legal. Some countries, states or provinces have laws or regulations that may limit what you’re permitted to do in your Network Marketing business (such as Not For Retail, cooling-off periods, no products kit sales in the first week or month or similar). The UK and Canada have laws that govern how you conduct your Network Marketing business. So do some other countries.

These laws are usually a well-meaning attempt by authorities to prevent unethical conduct. Unfortunately, they're really an attempt to control motives and attitudes, which can't be legislated, so they too often end up having the wrong effect on the wrong people.

Is Network Marketing ethical?
Like the question above, the answer is yes — depending on your motives and methods (why and how you do it). The principles on which Network Marketing is based are completely ethical. However, unethical people can introduce practices (such as “front end loading”) which are entirely unethical. Others try to cover up the fact that their business is Network Marketing, or the identity of their Network Marketing company, or that you need to sell, using deceptive practices that are, in reality, unethical.

None of this means that Network Marketing itself is unethical. It just means that, just like in industries where a great deal of money can be made (cars, white goods, real estate, etc), you’ll find people who are prepared to exploit and manipulate others for gain. Network Marketing is no different. All this really proves is that there’s obviously a lot of money to be made in Network Marketing, or those parasites wouldn’t bother.

Is Network Marketing the same as a Pyramid Scheme?
Absolutely not — unless people in Network Marketing have a Pyramid Scheme  mentality. For a full explanation of the differences between Network Marketing and illegal Pyramid Schemes, click here.

Do I need to sell to succeed in Network Marketing?
One way or another, you need to be able to sell in order to succeed, no matter what anyone tells you (see “Is Network Marketing ethical” above). Even if it's only yourself as a potential sponsor. Or your business opportunity. Or the need to set goals and action plans for success. You even need to sell yourself, from time to time, on the vision you originally had when you got involved in Network Marketing.

But selling doesn't have to be pushy or manipulative. In fact, the best the sellers are usually teachers and leaders, not hype merchants. Selling is WHAT you have to do to succeed. Pushy and manipulative are WHY and HOW you do it. There are better reasons (why) and methods (how) that produce faster, bigger results.

Do I need to sponsor/recruit to succeed in Network Marketing?
You can make some money and save some money in Network Marketing. But, if you really want to take advantage of the unique leverage offered by Network Marketing, you need to sponsor/recruit.

It’s like riding a bicycle. You can get yourself an old single-speed bike that has no gears. If you want to go faster, you have to pedal faster. If you want to climb a hill, you have to push harder, even though your speed is almost at a standstill. It's hard work, and it takes a long time to get anywhere.

On the other hand, a 10-speed bike means you can cruise at high speed in high gear, with very little effort then, when you need to climb a hill, you simply drop the gears back to low and put in a little more effort and get there much quicker for a lot less effort.

Sponsoring increases the amount of product flowing through your Network Marketing business, exponentially. And it boosts your rewards exponentially, too. It reduces the amount of time and effort required.

Best of all though — and you should never, ever lose sight of this reality — it gives you the opportunity to help other people become successful, financially independent, confident, and provides you with a large group of people, who share your own values, with whom to enjoy the journey and share the rewards.

What are the best kinds of products for Network Marketing?
If there’s one kind of product that's best suited to Network Marketing, it’s products that are genuinely consumable. That is, people use them up, then come back for more, regularly.

That means you acquire a customer once, then just keep on selling to them over and over and over again.

Products that cost a lot of money and are bought only once (or only every few years) can be successfully sold by Network Marketing. But you have to keep finding new customers every month.

Warning…
Sometimes you may think you have a consumable product — only to discover that you don’t a have a repeat customer base. The problem here is that many consumable products require a change in consumer behavior before the benefits can be gained. These may include some health or weight loss programs where, because of force of habit, customers cheat or give up before they get the benefits they wanted. Give careful thought to this important factor — people will usually not persist if they have to discipline themselves to change their behavior to gain a benefit.

Low margin products are usually not very successful in Network Marketing, either. Especially food and grocery lines, and especially if they put you in direct competition with large supermarket chains. For every company that succeeds in this area, there are many more that fail. Sure, lots of people join, because everyone buys these types of products. But, when margins are tight, and supply is often unreliable (lots of “out-of-stock” lines), the cost of making more than one delivery to supply a single customer order can make the business unprofitable very quickly.

What’s the best kind of compensation plan?
“One that works!” is the obvious answer to this question. But, seriously, there are many types of compensation plans, and people succeed and fail in ALL of them.

The truth is, you can take any compensation plan and make it work for you if you like the products or services, so don't get caught in the trap of only working one particular plan. Just be sure to study the plan and understand it so that you'll know how to maximize your efforts!

Can anyone really succeed in Network Marketing?
Yes, they can, providing they meet the conditions on which that level of success depends. This is what separates the winners from the losers in any area of life, not just Network Marketing.

The difference in Network Marketing is that those conditions are achievable by anyone willing to create a clear vision for themselves, then invest the time, effort and discipline needed to realize that vision.

It requires some basic knowledge, attitudes and skills. It does NOT require any particular gifts or talents, although these can help speed up the rate of success.

The secret of success in Network Marketing is leverage — the extent to which you can duplicate your achievements through sponsoring, training and supporting others to do what you do.


Additional Information That You Will Want To Read
The Financial Facts of Life | Seven Basic Reasons Why People Succeed
Understanding Compensation Plans |
Tax Advantages
Network Marketing FAQ
| Network Marketing or Pyramid Scheme

 

 

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