For most of us Filipinos, network marketing or multilevel marketing is a new business format that boggles many minds. As a concept, network marketing has been touted as the fastest way to accumulate wealth nowadays. The concept is used to penetrate the market as fast as possible without entailing expensive marketing costs such as marketing and promotions.
For the most part, network marketing is spread by word-of-mouth. You most likely have to be invited to join a business orientation or a seminar.
Network marketing is a nontraditional business with unconventional results. But yes, it is a business!
In recent years, several multi level marketing systems and direct selling groups have cropped up in the Philippines. They are the likes of Avon, First Quadrant, Forever Living, AIM Global, Fern-C, First Vita Plus, UNO, Herbalife, Mary Kay Cosmetics, My Benefits Club, NuSkin, USANA, and the world’s pioneer and oldest network marketing organization – Amway.
For a product distributorship business, the initial joining fee is minimal; it can range to Php 250 to around Php 20,000. In return, they give you a business license or membership to operate the business. Some network marketing groups give you product samples and a business kit with documents and brochures. However, the business does not end there.
Many of us have joined network marketing groups and after a while quit or do not renew their license and proclaim that it was a no good group. Oftentimes, many have expressed disappointments over the outcome when compared to their initial enthusiasm before joining the business.
In choosing your network marketing – which one to join?
There are basically four factors that you have to investigate before joining any network marketing or multi-level marketing group.
First, what are the products? Are they of good quality? Are there a variety of products that you can buy for personal consumption or retail to your customers? Some groups have single products such as a health juice, prepaid cards, or a website. The same goes if they only have one product line such as food supplements only, or just cosmetics. The choice is too limited.
Second, what is the company background? Will they be around for the long haul? Who are the company owners? Just as you choose which bank to put your money in, you also have to look into the networking company that you intend to join. It must be as stable as a bank, with an impeccable worldwide or local business.
Third, what is their compensation plan? Is it equitable?
Lastly, what kind of training and support will you get to be able to succeed in network marketing business? You need to be educated in the business.
Are they providing seminars to learn about their products? Also, you may want to know what continuing training programs they have to sustain your business and increase your profits.
There are more questions you can ask on your sponsor for the network marketing or multi level marketing business that you intend to join.
As a rule of thumb, a good network marketing group is structured in a way that:
It does not force you to stock up on their inventory and allows you to return goods that you bought from them. It must provide a buyer’s remorse clause that allows its members to return products that they bought, in effect, providing a full satisfaction, money-back guarantee.
There should not be any front-loading of products. Front loading happens when you are forced to buy products just to join the group. A few samples in the business or a joining kit are acceptable. Watch out though as some groups camouflage front-loading by saying the kit includes “many” product samples that are included in their substantial joining fee.
Still, other groups “require” you to continually buy products to retain active membership status. Otherwise, they delete you from the roster of members. In this case, I think, this is not a good network marketing practice.
It does not pay a substantial commission for recruiting members. The normal practice for network marketing companies is between 5 to 10% of the joining fee. Otherwise, if the recruiting fee commission is quite big the members will tend to focus on recruitment alone just so they can make a fast buck. It would be better if commissions are only paid when a product is sold, and not on the recruitment or joining fee.
I’ve compiled a list of 25 Questions to Ask Your Sponsor in MLM. You may want to take a look at it before joining that network company you’re eyeing for. It would definitely help you stream line the various network marketing choices that you have.