Annies Home Journal

Annies Home Journal contains information and articles, about working from home, as well as business opportunities, and what it takes to make a home based business work.

Wednesday, October 11, 2006

"The Network Marketing company you choose to represent is your vehicle. If you've gotten a good one, you should be able to hop in, turn the key and drive off in your new business vehicle down the highway of success. So when you go looking for the right opportunity, use the same caution that you'd use when you're buying a car." Robert Butwin

As you're picking the right vehicle to get you to your future destination, look for one that's FUN and SAFE, as well as dependable. There are basically two categories of vehicles.

1.Direct Sales Companies
These are known as "seller-based" because they give more income to the distributor for a retail sale. The products are usually higher-ticket, one-time sale items, like air or water filters, high-priced memberships, automotive products, and so forth. These sales are handled by SALESPEOPLE, and those who are skilled and ambitious can make good money from substantial upfront commissions. However, you may need to make a considerable investment in inventory, and the likelihood of finding people to join you in this type of product line is low. Additionally, there is little or no actual residual income from these direct sales companies.

2.Multi-Level Companies
These companies typically offer reasonably priced products that people consume and reorder. A distributor typically earns less money up-front with these consumable products, but the long-term potential of reorders year after year can be substantial. These companies are also easier to recruit new people to than direct sales for several reasons.

It costs a nominal amount (usually a few hundred dollars or less) to get involved.
Residual income is one important goal and attractive result of this approach to marketing.

Individuals benefit from a bigger picture, put in place by many people,each doing a little bit of work. The work is distribution, as opposed to "hard selling," which many people would rather not do. The process is often called "networking" because distributors share ideas and products to a "network" of people.

Here's a checklist that will help you choose the best vehicle for you.

1.What is the product or service?
You'll be talking about it extensively, so you need to be proud and excited to tell the story. You'll also need to be a "product of your product," which means you use it in your daily life and understand it first hand.
2.Does it have integrity?
Check out the company, people and products. Do they do what they say? Without their integrity behind you, you will not be successful.
3.Is the company "Distributor-Driven?"
In other words, does it function for the benefit of the people who distribute its products? Distributors are the profit centers of a direct selling or network marketing company. They should be fairly paid and have access to fairly priced marketing tools. Perhaps most vital to the success of the distributor and the company, however, is that ongoing training and effective distributor services be in place. Check out your prospective company with these things in mind, both for the short-term new person, and the long-term association.
4. Does it have good management?
As in any business, excellent management can mean the difference between success and failure. Do they understand their product?
Do they know how to run a company?
Do they have network marketing backgrounds?
4.Does it have a duplicable business system?
Most companies leave this up to the distributors - allowing them the "freedom" to do their own thing. A few companies consider this irresponsible at best and a recipe for failure on average. Look for a company that publishes a video or booklet describing the steps you'll need to take to be successful. This is a company that recognizes that your success is their success, and they're doing something to ensure it.
5.Does it have a fair, just and JUICY Compensation Plan?
It would be wise for you to find a mentor who can help you determine whether the compensation plan is a good and balanced one. Here are a few pitfalls to avoid.
Some plans can take away people that you have brought in.
Some plans are top-heavy; they reward people who are already earning the most, or who have been in the longest, at the expense of the new people.
Some companies change their plans often. This is disruptive and usually not in the best interest of distributors.
Some companies have challenges as they grow. Learning from these challenges is great, but some companies never learn.
Some companies lead people on with rewards like cruises and prizes. Look for companies that reward with compensation - that you can use as you choose!
Some companies make wild claims about the big money you can make quickly. Don't buy it!

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