Two Key Differences Between the MLM and Network Marketing of Today and Yesterday
If you've decided to start a network marketing or MLM business, and done some research, you've no doubt read a lot of opinions about this business. You have probably found some intense debates between pro-MLM business builders and others who are very negative and totally opposed to the idea.
There are two issues that seem to come up over and over, and you almost always find these brought up anytime network marketing and MLM is discussed. While there are many interesting points on both sides of these issues, here is a balanced look at both.
Recruiting the World vs Who Will Buy Products?
This is one of the most popular points that you'll see discussed. It typically goes something like this. "Potential MLM recruits get fired up at the thought of sponsoring people and seeing their downline explode, but somewhere along the line someone will actually need to sell the opportunity's products to someone, or nobody makes any money."
A better way to put this, I think, is to say that product will actually have to be purchased and consumed by someone. In a good network marketing opportunity, with quality and fairly priced products that people actually use, there will be quite a lot of consumption and product usage by the distributors themselves. Retail sales to customers outside the marketing plan will normally happen simply by spreading the word (not everyone will want to be a distributor), so you should see product consumption two ways.
Now, that being said, if someone starts a business focused strictly on recruiting with no real product of value for ongoing consumption, this will create the situation that fuels the arguments of network marketing naysayers. When all the focus is on recruiting, combined with payouts on start up materials, this situation can easily happen.
If it's all about recruiting, getting bonuses on start up packages, but no ongoing product sales or usage, there is a big problem. However, in a good situation with a reputable network marketing business, this is not going to be the case. A legitimate opportunity will emphasize recruiting and sponsoring, yes, but will also be built around products that are consumed and used regularly.
Recruiting in Your Warm Market
When discussing MLM recruiting, this point often comes up. "All of us have a certain number of people we know, to whom we have the opportunity to pitch our business. Be prepared to sell all your friends, relatives, and acquaintances a business opportunity they may have no interest in. After you contact all of them, who do you talk to then?"
This was a problem for many in years past, and still can be when new distributors are shown only the traditional "warm market" approach to recruiting and sponsoring. It sounds really good, and in theory you sponsor many of these people and they in turn contact their entire warm market and duplicate the process. The net result is that you get a big downline and make a lot of money.
In reality, it usually doesn't work that way. Eventually, for most network marketers, it will become necessary to go outside that warm market if you want to expand your business to a full-time income level and beyond. This is where the Internet and modern technology has changed things so much.
Making money in network marketing and MLM is no longer a function of how many people you know personally, and how well you can persuade those people to sign up. With proper guidance and coaching, anyone now has the ability to reach a vast number of people they've never met, who are actively looking for ways to make money from home and are receptive to new business ideas.
MLM and network marketing as a business continues to evolve. Things are different now, and old perceptions are becoming less and less accurate. Once a function of how many people you know and your selling skills, today the key to success is attracting home business prospects to your opportunity when they are serious and ready to take action. This will continue to be the key to success in the future.
There are two issues that seem to come up over and over, and you almost always find these brought up anytime network marketing and MLM is discussed. While there are many interesting points on both sides of these issues, here is a balanced look at both.
Recruiting the World vs Who Will Buy Products?
This is one of the most popular points that you'll see discussed. It typically goes something like this. "Potential MLM recruits get fired up at the thought of sponsoring people and seeing their downline explode, but somewhere along the line someone will actually need to sell the opportunity's products to someone, or nobody makes any money."
A better way to put this, I think, is to say that product will actually have to be purchased and consumed by someone. In a good network marketing opportunity, with quality and fairly priced products that people actually use, there will be quite a lot of consumption and product usage by the distributors themselves. Retail sales to customers outside the marketing plan will normally happen simply by spreading the word (not everyone will want to be a distributor), so you should see product consumption two ways.
Now, that being said, if someone starts a business focused strictly on recruiting with no real product of value for ongoing consumption, this will create the situation that fuels the arguments of network marketing naysayers. When all the focus is on recruiting, combined with payouts on start up materials, this situation can easily happen.
If it's all about recruiting, getting bonuses on start up packages, but no ongoing product sales or usage, there is a big problem. However, in a good situation with a reputable network marketing business, this is not going to be the case. A legitimate opportunity will emphasize recruiting and sponsoring, yes, but will also be built around products that are consumed and used regularly.
Recruiting in Your Warm Market
When discussing MLM recruiting, this point often comes up. "All of us have a certain number of people we know, to whom we have the opportunity to pitch our business. Be prepared to sell all your friends, relatives, and acquaintances a business opportunity they may have no interest in. After you contact all of them, who do you talk to then?"
This was a problem for many in years past, and still can be when new distributors are shown only the traditional "warm market" approach to recruiting and sponsoring. It sounds really good, and in theory you sponsor many of these people and they in turn contact their entire warm market and duplicate the process. The net result is that you get a big downline and make a lot of money.
In reality, it usually doesn't work that way. Eventually, for most network marketers, it will become necessary to go outside that warm market if you want to expand your business to a full-time income level and beyond. This is where the Internet and modern technology has changed things so much.
Making money in network marketing and MLM is no longer a function of how many people you know personally, and how well you can persuade those people to sign up. With proper guidance and coaching, anyone now has the ability to reach a vast number of people they've never met, who are actively looking for ways to make money from home and are receptive to new business ideas.
MLM and network marketing as a business continues to evolve. Things are different now, and old perceptions are becoming less and less accurate. Once a function of how many people you know and your selling skills, today the key to success is attracting home business prospects to your opportunity when they are serious and ready to take action. This will continue to be the key to success in the future.
About the Author:
When you're ready to start a profitable home based business, Eldon Beard is ready to help. Visit his network marketing blog and learn how to build a profitable, lasting home business.
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