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Showing posts with label Multi-Level Marketing. Show all posts
Showing posts with label Multi-Level Marketing. Show all posts
Sunday, January 17, 2010
Monday, December 28, 2009
Affliate Programs Versus Multi-Level Marketing
Affiliate programs on the internet are typically links into a website that give you, the referrer, credit when somebody uses your link or when a sale is made after your link is clicked. Typically, affiliate program effectiveness for you is a function of the amount of traffic you have on your website, how closely the affiliate is related to your subject matter on your website, and how visible the link or banner is on your website. So generally, it is you advertising for another website and you get paid for how much business you generate for them.
Affiliate programs that pay based on sales pay a varying degree of commissions, I have seen anywhere from 4% to 75%. You can actually measure how effective the program is for you based on the number of clicks the advertisement gets or the dollars in commissions you receive from having the advertisement on your website. Dollars is a better measurement but clicks might be easier to measure in the beginning as you are building traffic.
A multi-level marketing company or upline can similarly use affiliate programs to recruit or sell products, or both. Commissions on multi-level marketing for sales vary depending on many factors, but I have seen companies pay as much as 50% on direct sales with a decent amount of sales volume. In addition, you can also earn commissions from other distributors that you bring into the business, and those they bring into the business, and so forth. Some companies have unlimited depth and pay commissions based on overall volume. Others have break-away programs that pay on so many levels after the distributors below you break away. Ultimately, though, you can make commissions, perhaps small commissions, on each and every single sale within your downline network of distributors.
So the question really is: Is it better to use an affiliate program or a multi-level market program to generate income from your website? I will give you this answer: Sales from your website will be generated by how closely the product matches the information provided. If you sell household products on a business website, you will probably not see much sales. However, if you sell a business opportunity on a business website, you may sign distributors. Will those distributors buy or sell the products? I believe so, but I do not have personal proof of this at this time.
On the other hand, if you have an ecommerce website that sells the product that also recruits new distributors, this tends to be very successful as long as you can generate sales. Selling via ecommerce is retailing, and this usually means having the right product at the right price with the right services. Not everything will sell via ecommerce, but things that will not sell ecommerce probably would also not make good multi-level marketing products.
Some MLM companies have special rules for operating on the internet so make sure you know what these are before you get started. Good luck and let me know how it goes!
Affiliate programs that pay based on sales pay a varying degree of commissions, I have seen anywhere from 4% to 75%. You can actually measure how effective the program is for you based on the number of clicks the advertisement gets or the dollars in commissions you receive from having the advertisement on your website. Dollars is a better measurement but clicks might be easier to measure in the beginning as you are building traffic.
A multi-level marketing company or upline can similarly use affiliate programs to recruit or sell products, or both. Commissions on multi-level marketing for sales vary depending on many factors, but I have seen companies pay as much as 50% on direct sales with a decent amount of sales volume. In addition, you can also earn commissions from other distributors that you bring into the business, and those they bring into the business, and so forth. Some companies have unlimited depth and pay commissions based on overall volume. Others have break-away programs that pay on so many levels after the distributors below you break away. Ultimately, though, you can make commissions, perhaps small commissions, on each and every single sale within your downline network of distributors.
So the question really is: Is it better to use an affiliate program or a multi-level market program to generate income from your website? I will give you this answer: Sales from your website will be generated by how closely the product matches the information provided. If you sell household products on a business website, you will probably not see much sales. However, if you sell a business opportunity on a business website, you may sign distributors. Will those distributors buy or sell the products? I believe so, but I do not have personal proof of this at this time.
On the other hand, if you have an ecommerce website that sells the product that also recruits new distributors, this tends to be very successful as long as you can generate sales. Selling via ecommerce is retailing, and this usually means having the right product at the right price with the right services. Not everything will sell via ecommerce, but things that will not sell ecommerce probably would also not make good multi-level marketing products.
Some MLM companies have special rules for operating on the internet so make sure you know what these are before you get started. Good luck and let me know how it goes!
Sunday, December 20, 2009
Multi-Level Marketing Shortcuts
Multi-level marketing companies usually provide training and materials needed for the new distributor to begin making sales. Often the material is not well tested but it is usually professionally created so that it does help to create a professional image for the distributor. Materials provided can be used to sell the product and or recruit new distributors, and is compliant with company policies. It would cost quite a bit to produce your own materials and you would still have to make sure the company would approve of them, so using the company's printed material is preferable.
When you make the move to the internet, you won't have an option to take web pages directly from the company so you will be designing your own. The nice thing is that you can use the copy from the company's printed material, you just have to include the trademark and copyright symbols. You probably also have to identify yourself as an independent business person. You can check with the company or your upline for requirements of doing business on the internet. But using the copy, or the words, makes it a little simpler than trying to write your website from scratch.
It is possible that the company has a distributor marketing plan already created that can be put to use in your business. Be careful taking a pre-packaged marketing plan though, because if everyone is doing the same thing it may not be a good way to go. It is always best to market in a way nobody else is doing to get the best response.
This brings up a good point about selling a multi-level marketing product: When you are the only one selling an item there is no worry about competition, but selling amongst a group of other distributors might make it difficult to market the product. Always remember to sell yourself and find benefits of doing business with you. Avoid competing head-to-head with other distributors when possible.
We will have to talk more about how to compete against other businesses when selling a product in a future post.
When you make the move to the internet, you won't have an option to take web pages directly from the company so you will be designing your own. The nice thing is that you can use the copy from the company's printed material, you just have to include the trademark and copyright symbols. You probably also have to identify yourself as an independent business person. You can check with the company or your upline for requirements of doing business on the internet. But using the copy, or the words, makes it a little simpler than trying to write your website from scratch.
It is possible that the company has a distributor marketing plan already created that can be put to use in your business. Be careful taking a pre-packaged marketing plan though, because if everyone is doing the same thing it may not be a good way to go. It is always best to market in a way nobody else is doing to get the best response.
This brings up a good point about selling a multi-level marketing product: When you are the only one selling an item there is no worry about competition, but selling amongst a group of other distributors might make it difficult to market the product. Always remember to sell yourself and find benefits of doing business with you. Avoid competing head-to-head with other distributors when possible.
We will have to talk more about how to compete against other businesses when selling a product in a future post.
Friday, December 11, 2009
Similarities and Differences Between Small Business and MLM
A multi-level marketing distributorship typically is a small business run by a person, a couple, or a family. It can also be a larger distributorship run by a company with several employees. I have known distributorships to have revenues of several million dollars per year.
In a typical small business, a product is invented, manufactured, and or purchased, and can be sold to a customer or to another business. Similarly, a multi-level marketing distributorship purchases product or the product is purchased on behalf of a distributor from the company, then is sold to a customer. A distributor will recruit other distributors to sell the product, which is similar to finding other businesses to sell the product.
In a small business, you could have the product drop-shipped to your customer (which could be another business). Similarly, the typical multi-level marketing company allows the product to be sold from the MLM company directly to the consumer with the distributor getting the credit. Drop shipping typically allows a company of whichever kind to keep their inventories low or non-existent.
So we see that the typical small business and the typical MLM distributorship function in exactly the same way. They buy and sell products for a profit. They can sell to customers or other businesses. They can both keep their inventories low or they can stock to meet customer demand.
The main way MLM is different is that it earns commission on several levels of business to business sales, i.e. your downline or network. This gives you a great incentive to help out those you sponsor, those they sponsor, and sometimes those 10 levels below you. MLM is a helping business. Multi-level marketing is also the kind of business where you can build up income over time for a less than superhuman effort today. You leverage your efforts with independent business people rather than employees. The income you generate can take you through retirement and you can potentially leave it to your heirs.
Now a multi-level marketing distributorship is a business and it can get busy. Busyness is a good problem to have though.
In a typical small business, a product is invented, manufactured, and or purchased, and can be sold to a customer or to another business. Similarly, a multi-level marketing distributorship purchases product or the product is purchased on behalf of a distributor from the company, then is sold to a customer. A distributor will recruit other distributors to sell the product, which is similar to finding other businesses to sell the product.
In a small business, you could have the product drop-shipped to your customer (which could be another business). Similarly, the typical multi-level marketing company allows the product to be sold from the MLM company directly to the consumer with the distributor getting the credit. Drop shipping typically allows a company of whichever kind to keep their inventories low or non-existent.
So we see that the typical small business and the typical MLM distributorship function in exactly the same way. They buy and sell products for a profit. They can sell to customers or other businesses. They can both keep their inventories low or they can stock to meet customer demand.
The main way MLM is different is that it earns commission on several levels of business to business sales, i.e. your downline or network. This gives you a great incentive to help out those you sponsor, those they sponsor, and sometimes those 10 levels below you. MLM is a helping business. Multi-level marketing is also the kind of business where you can build up income over time for a less than superhuman effort today. You leverage your efforts with independent business people rather than employees. The income you generate can take you through retirement and you can potentially leave it to your heirs.
Now a multi-level marketing distributorship is a business and it can get busy. Busyness is a good problem to have though.
Tuesday, December 8, 2009
What's Wrong With This Picture?
You are excited. You sign up and buy the kit. You are going to make big money. All you have to do is sponsor three and teach them to sponsor three. Sounds soooo easy. You call all of your friends and none - zero want to be your distributor. But but all you have to do is... Then you try and try and try, you get more and more frustrated. Then discouragement sets in. People are telling you that you seem like you are part of some cult, and that this will never amount to anything. You know what else your sponsor told you? That you never have to sell... Hey, you've been selling your opportunity to your friends and family right?
These are the two lies that sponsors tell: You only have to sponsor 3 - and you don't have to sell. "Everybody" uses these lies, because they are true in theory. I mean, you don't have to sell if you are buying for yourself and sponsoring others, or do you? Sponsoring is recruiting and is very similar to selling; so technically - it is selling. And you do sell to yourself. If you advertise, your marketing message is a sales pitch and usually requires a sales presentation as a follow up. Even if you are recruiting this is true.
As far as needing to sponsor just 3 people and teach them to sponsor 3, in my experience your attempt to sponsor from your warm market is nearly impossible and where else would you get just 3 from? Let's say that you beat your head against a brick wall long enough and it crumbled... in other words you sponsored 3. The likelihood that all 3 will want to do anything is slim and none. Especially if you use the same "sales" pitch: sponsor just three, no selling involved. Some people will just sign up to get you off their back. Others will sign up and get busy. Others must watch Monday night football and have a case of beer nightly. Some just have the misfortune of getting sick, injured, fired, divorced... you just never know what you're going to get.
Ok, so what do you really have to do? First, realize that you are in business. You started a small business and you will need to know how to sell your product. No way around it. You must sell to yourself, your warm market, people you know, and people you don't know. You do this to learn their objections. Hey if you sell something, that is great, but your greatest learning experience is when people don't buy. Why did they choose not to buy? Very important stuff because we need to learn how to overcome the objections to your product... mainly because the product is also the opportunity.
When you sell an opportunity, you are selling yourself as sponsor and your lifestyle, but you are also selling your product. Because... who is going to buy the product? We know from earlier posts that legal MLM companies must have product sales in order to pay commissions to distributors. If everyone is recruiting and nobody is buying or selling the product, how much money do you make? That's right, zero. "Gasp," you say, "I don't want to work my butt off and earn nothing!" Well then, you must sell the product to yourself, to customers, and to your downline distributors.
Second, you must realize that even though theoretically it's possible to only need to sponsor three (or four or five), the reality is that 95% or more of distributors will drop out. No matter how they are recruited, no matter how much support, no matter if you build their business for them, no matter if you have the greatest product ever... they will drop out. So you will constantly need to replace your drop out distributors in order to keep your business growing.
Another sad reality is that good distributors (i.e. big fish) work not with all of their distributors constantly, but mainly with their best producers. Do I agree with doing this? Absolutely. You should be there for all your distributors but usually it's the best ones who want and deserve help. The others are bothered when you call them.
One thing you can do to keep drop out distributors happy: Don't oversell your opportunity. If you tell your distributors they can make money while playing on the computer, they'll be playing solitaire wondering why the checks are not flowing in. Tell them that hard work pays, they will either work hard or not, but they won't be unhappy either way.
Next post I will write about how multi-level marketing is similar to and different from other small businesses.
These are the two lies that sponsors tell: You only have to sponsor 3 - and you don't have to sell. "Everybody" uses these lies, because they are true in theory. I mean, you don't have to sell if you are buying for yourself and sponsoring others, or do you? Sponsoring is recruiting and is very similar to selling; so technically - it is selling. And you do sell to yourself. If you advertise, your marketing message is a sales pitch and usually requires a sales presentation as a follow up. Even if you are recruiting this is true.
As far as needing to sponsor just 3 people and teach them to sponsor 3, in my experience your attempt to sponsor from your warm market is nearly impossible and where else would you get just 3 from? Let's say that you beat your head against a brick wall long enough and it crumbled... in other words you sponsored 3. The likelihood that all 3 will want to do anything is slim and none. Especially if you use the same "sales" pitch: sponsor just three, no selling involved. Some people will just sign up to get you off their back. Others will sign up and get busy. Others must watch Monday night football and have a case of beer nightly. Some just have the misfortune of getting sick, injured, fired, divorced... you just never know what you're going to get.
Ok, so what do you really have to do? First, realize that you are in business. You started a small business and you will need to know how to sell your product. No way around it. You must sell to yourself, your warm market, people you know, and people you don't know. You do this to learn their objections. Hey if you sell something, that is great, but your greatest learning experience is when people don't buy. Why did they choose not to buy? Very important stuff because we need to learn how to overcome the objections to your product... mainly because the product is also the opportunity.
When you sell an opportunity, you are selling yourself as sponsor and your lifestyle, but you are also selling your product. Because... who is going to buy the product? We know from earlier posts that legal MLM companies must have product sales in order to pay commissions to distributors. If everyone is recruiting and nobody is buying or selling the product, how much money do you make? That's right, zero. "Gasp," you say, "I don't want to work my butt off and earn nothing!" Well then, you must sell the product to yourself, to customers, and to your downline distributors.
Second, you must realize that even though theoretically it's possible to only need to sponsor three (or four or five), the reality is that 95% or more of distributors will drop out. No matter how they are recruited, no matter how much support, no matter if you build their business for them, no matter if you have the greatest product ever... they will drop out. So you will constantly need to replace your drop out distributors in order to keep your business growing.
Another sad reality is that good distributors (i.e. big fish) work not with all of their distributors constantly, but mainly with their best producers. Do I agree with doing this? Absolutely. You should be there for all your distributors but usually it's the best ones who want and deserve help. The others are bothered when you call them.
One thing you can do to keep drop out distributors happy: Don't oversell your opportunity. If you tell your distributors they can make money while playing on the computer, they'll be playing solitaire wondering why the checks are not flowing in. Tell them that hard work pays, they will either work hard or not, but they won't be unhappy either way.
Next post I will write about how multi-level marketing is similar to and different from other small businesses.
Monday, December 7, 2009
What Do You Do with Distributors
We have been talking about the process of signing up new distributors and I will add one thing to it: People will become your distributor in their time not yours. You need to have the patience of a fisherman, otherwise you will scare the fish away! Your job is to support them during the process of consideration, give them what they need to make a good decision then stand back. Any pressure or hype will probably get you distributors that will do nothing.
Once you begin signing up distributors, your focus really switches to supporting them. You should give them encouragement, train them, and help them as much as they will allow you to. You should give the most help to your best and most trustworthy distributors, and you could go as far as building for them with them by your side if this is agreeable to them.
That is mainly it. Of course you continue to gather leads and work with prospects all along for yourself but now you have the added work of supporting distributors. The added burden is not huge and is usually enjoyable. However, don't frustrate yourself because somebody is not doing their part, just work with the ones who are.
Once you begin signing up distributors, your focus really switches to supporting them. You should give them encouragement, train them, and help them as much as they will allow you to. You should give the most help to your best and most trustworthy distributors, and you could go as far as building for them with them by your side if this is agreeable to them.
That is mainly it. Of course you continue to gather leads and work with prospects all along for yourself but now you have the added work of supporting distributors. The added burden is not huge and is usually enjoyable. However, don't frustrate yourself because somebody is not doing their part, just work with the ones who are.
Thursday, December 3, 2009
Advertising in the MLM World
There are legal issues involved with advertising opportunities that you need to be aware of. There are often issues involved with using a company’s name, product name, and product likeness that you also need to be aware of. At this point, I am not going to go into detail about what you can and cannot do or can and cannot say, but I will say that your company probably has published rules or approved advertising. Bigger upline organizations will also be well aware of company rules and can help you out when and if you want to advertise.
You can choose to promote your product or opportunity in advertising by avoiding the company name (i.e. Amway) and such, but you do have to be aware of the laws involved with advertising. I personally feel comfortable with an advertisement if I am telling the truth and am giving the reader realistic expectations. I have seen bigger business people fail the second test and get in trouble. I mean, sure you can make $1 million a month, but nearly all distributors will fall short of this amount. Even using possible, i.e. $1 million a month possible, does not let you off the hook for setting high expectations. Even if you quote your own commissions, you may still be setting unreasonable expectations so be careful.
For an advertisement to be successful, there has to be something delivered or desired in return for the effort to respond to the advertisement. Free information is ok to use, but free information about what? Free information containing secrets about multi-level marketing. That is more substantial. But do you actually have secrets about MLM that others do not know? Again, we do not want to create unfulfilled expectations.
An important part of advertising is filtering. We not only want to attract people interested in the opportunity, we also want to filter out people who will waste our time, sign up and do nothing, or generally be a problem for us. Setting reasonable expectations helps, but we need to craft our advertisement to attract good people while avoiding others. For instance: “Easy money in MLM. Make money while watching TV.” This would not be good. Try this instead: “Hard work in MLM is rewarded. Free report.”
Your follow up information must fulfill your advertisement and generally should be a presentation for your product or opportunity. You could use a two step approach, giving a bigger advertisement on the first mailing, then delivering the presentation on the second. You could also do a one step or two step with a personal presentation at the end. Because the presentation is going to be specific to the company or the company’s product, you should use the company’s materials or have your materials approved by the company. A cover letter on letterhead is generally ok, but anything that goes into detail should be company approved.
I am going a little long with this blog and there is so much more I want to say about advertising. I guess we will have to continue tomorrow.
You can choose to promote your product or opportunity in advertising by avoiding the company name (i.e. Amway) and such, but you do have to be aware of the laws involved with advertising. I personally feel comfortable with an advertisement if I am telling the truth and am giving the reader realistic expectations. I have seen bigger business people fail the second test and get in trouble. I mean, sure you can make $1 million a month, but nearly all distributors will fall short of this amount. Even using possible, i.e. $1 million a month possible, does not let you off the hook for setting high expectations. Even if you quote your own commissions, you may still be setting unreasonable expectations so be careful.
For an advertisement to be successful, there has to be something delivered or desired in return for the effort to respond to the advertisement. Free information is ok to use, but free information about what? Free information containing secrets about multi-level marketing. That is more substantial. But do you actually have secrets about MLM that others do not know? Again, we do not want to create unfulfilled expectations.
An important part of advertising is filtering. We not only want to attract people interested in the opportunity, we also want to filter out people who will waste our time, sign up and do nothing, or generally be a problem for us. Setting reasonable expectations helps, but we need to craft our advertisement to attract good people while avoiding others. For instance: “Easy money in MLM. Make money while watching TV.” This would not be good. Try this instead: “Hard work in MLM is rewarded. Free report.”
Your follow up information must fulfill your advertisement and generally should be a presentation for your product or opportunity. You could use a two step approach, giving a bigger advertisement on the first mailing, then delivering the presentation on the second. You could also do a one step or two step with a personal presentation at the end. Because the presentation is going to be specific to the company or the company’s product, you should use the company’s materials or have your materials approved by the company. A cover letter on letterhead is generally ok, but anything that goes into detail should be company approved.
I am going a little long with this blog and there is so much more I want to say about advertising. I guess we will have to continue tomorrow.
Reasons To Do Multi-Level
I have probably spooked you into believing that it really isn’t worth it to do multi-level marketing. The main reasons to join a multi-level marketing company and work so hard is that you can make a lot of money and become financially independent. That is not to say that everyone who does multi-level marketing is wildly successful because they aren’t. You really have to know what you’re doing. But if you do know what to do you can make a ton of cash.
We had a total group of around 350 distributors and made between $14,000 and $20,000 in monthly commissions for two full years. That is what multi-level marketing can do for you. Unfortunately, we were working with a dietary supplement company that had the #1 product in the 1990’s, but in 1999 imploded because of issues with the health of its users, lying to the FDA, and getting a lot of bad press. I am not going to mention the company’s name but if you know the industry you can probably figure it out.
Our group was about 50% dropouts who never did anything, 45% small salespeople who sold a little product, and the rest hard-working sales people who could both sell and sponsor. We probably had three big fish who could really sponsor. We were part of the distributor advisory board for the multi-level marketing company and met people who did over $1 million per month in commissions, so we were not the largest by far. So the company had really, really big distributors and really, really little distributors (and dropouts), despite the major success of the product.
So how do you go from being the little guy to being the big fish? You find what works and you do it over and over, and bigger and bigger. Spending money is out of the question when you first start, but money can give you leverage to grow larger quickly once you have gotten to a certain level. You just don’t want to spend it foolishly, and spending it on big unproven advertising campaigns is always out of the question. I will post more about advertising in the future, but for now, spending money on advertising is out of the question when you are just starting. In fact, spending money on anything that you can do for free is out of the question.
Back to the multi-level marketing company for a minute. The company’s product was great, but the company’s business practices and attitudes caused them to run afoul of the media and the government, and ultimately their customers and distributors turned on them. This is sometimes what happens with a quickly growing company. They don’t know how to handle the growth and end up destroying themselves. This is not a good situation when you are depending on them for all of your income. Sometimes going with the tried and true is a better idea.
We had a total group of around 350 distributors and made between $14,000 and $20,000 in monthly commissions for two full years. That is what multi-level marketing can do for you. Unfortunately, we were working with a dietary supplement company that had the #1 product in the 1990’s, but in 1999 imploded because of issues with the health of its users, lying to the FDA, and getting a lot of bad press. I am not going to mention the company’s name but if you know the industry you can probably figure it out.
Our group was about 50% dropouts who never did anything, 45% small salespeople who sold a little product, and the rest hard-working sales people who could both sell and sponsor. We probably had three big fish who could really sponsor. We were part of the distributor advisory board for the multi-level marketing company and met people who did over $1 million per month in commissions, so we were not the largest by far. So the company had really, really big distributors and really, really little distributors (and dropouts), despite the major success of the product.
So how do you go from being the little guy to being the big fish? You find what works and you do it over and over, and bigger and bigger. Spending money is out of the question when you first start, but money can give you leverage to grow larger quickly once you have gotten to a certain level. You just don’t want to spend it foolishly, and spending it on big unproven advertising campaigns is always out of the question. I will post more about advertising in the future, but for now, spending money on advertising is out of the question when you are just starting. In fact, spending money on anything that you can do for free is out of the question.
Back to the multi-level marketing company for a minute. The company’s product was great, but the company’s business practices and attitudes caused them to run afoul of the media and the government, and ultimately their customers and distributors turned on them. This is sometimes what happens with a quickly growing company. They don’t know how to handle the growth and end up destroying themselves. This is not a good situation when you are depending on them for all of your income. Sometimes going with the tried and true is a better idea.
Why Can’t I Sponsor?
Sponsoring is recruiting new distributors into the multi-level marketing company. Once a distributor is sponsored under you, you share in their sales success. They can also sponsor other distributors, which also contributes to your commissions.
It is nearly impossible for a new distributor to sponsor because they seek people from their warm market to join, like family members, friends, neighbors, and other people they know well. The problem with this is that given any individual person, the person is very unlikely to want to start a new business.
This is very depressing, isn’t it? The warm market you are depending on probably won’t want to join. It gets worse. Your warm market knows you and are unlikely to believe that what you have is incredible or even credible. After all, they’ve known you for a while and you are not the kind of person who can do this kind of thing. People outside of your warm market are actually more likely to join because they have no preconceived notion of who you are.
More bad news: Let’s say you contact one new random person a day, how long would it take you to sponsor a new distributor? In my experience, with a rapidly growing company, you generally could sponsor 1 in 100 people. That is a very general estimate and it may be easier or harder to sponsor based upon a lot of factors.
Even more bad news: Your one distributor is unlikely to produce. Typically 1 in 100 distributors will sell and sponsor, many will drop out and many will do very little.
So to get three producing distributors, as your sponsor says you need to be successful, you need to make contact with about 30,000 different people. You can see that the typical way people are recruited is a recipe for failure.
So how do you change the odds? By contacting random people you can expect the information above to be true. If you want to sponsor more of the people you contact, you have to contact the right people. Better yet, you need people to come to you. I will write more about this soon.
It is nearly impossible for a new distributor to sponsor because they seek people from their warm market to join, like family members, friends, neighbors, and other people they know well. The problem with this is that given any individual person, the person is very unlikely to want to start a new business.
This is very depressing, isn’t it? The warm market you are depending on probably won’t want to join. It gets worse. Your warm market knows you and are unlikely to believe that what you have is incredible or even credible. After all, they’ve known you for a while and you are not the kind of person who can do this kind of thing. People outside of your warm market are actually more likely to join because they have no preconceived notion of who you are.
More bad news: Let’s say you contact one new random person a day, how long would it take you to sponsor a new distributor? In my experience, with a rapidly growing company, you generally could sponsor 1 in 100 people. That is a very general estimate and it may be easier or harder to sponsor based upon a lot of factors.
Even more bad news: Your one distributor is unlikely to produce. Typically 1 in 100 distributors will sell and sponsor, many will drop out and many will do very little.
So to get three producing distributors, as your sponsor says you need to be successful, you need to make contact with about 30,000 different people. You can see that the typical way people are recruited is a recipe for failure.
So how do you change the odds? By contacting random people you can expect the information above to be true. If you want to sponsor more of the people you contact, you have to contact the right people. Better yet, you need people to come to you. I will write more about this soon.
How Do I Make Money?
You may think that you make money in multi-level marketing by signing up 3 people (or so) and teaching them to do the same. Then, when your downline becomes so big you earn big money. Well no. You earn money when product is sold by you and or your downline.
We had a past distributor who joined a new company who cannot sponsor but sells like crazy. She makes the most money in the company. Other distributors that we know make money without direct sales by buying product for themselves, then teaching their downline to do the same thing.
In our past life we both sold like crazy and sponsored like crazy, but we still made the majority of our money from sponsoring through our downline product sales because we spent so much of our direct sales profits on promotional material.
You will make money in multi-level marketing when product is sold. Hopefully your product is in demand. How do you know? Are you willing to buy the product with no hope of making money from the business? If not, I would look elsewhere.
However, don’t give up so easily... It may be that your product is worth buying but perhaps you just don’t understand why at this point. Spend time studying and using your product. Figure out why you would want to buy it. Is it better? Is it less expensive to use? What are the features and benefits of using the product?
Check out this information on the Direct Selling Association’s website:
http://www.dsa.org/aboutselling/
We had a past distributor who joined a new company who cannot sponsor but sells like crazy. She makes the most money in the company. Other distributors that we know make money without direct sales by buying product for themselves, then teaching their downline to do the same thing.
In our past life we both sold like crazy and sponsored like crazy, but we still made the majority of our money from sponsoring through our downline product sales because we spent so much of our direct sales profits on promotional material.
You will make money in multi-level marketing when product is sold. Hopefully your product is in demand. How do you know? Are you willing to buy the product with no hope of making money from the business? If not, I would look elsewhere.
However, don’t give up so easily... It may be that your product is worth buying but perhaps you just don’t understand why at this point. Spend time studying and using your product. Figure out why you would want to buy it. Is it better? Is it less expensive to use? What are the features and benefits of using the product?
Check out this information on the Direct Selling Association’s website:
http://www.dsa.org/aboutselling/
Multi-Level Marketing Is A Scam?
Actually, multi-level marketing is not a scam as long as distributors are earning commissions based on product sales and not on just signing up new distributors. Multi-level marketing is not a pyramid scheme either as a typical downline does not resemble a pyramid anymore than a tree does. Even if it did resemble a pyramid it would not be a pyramid scheme as ponzi schemes (another name for pyramid schemes) tend to take money from people under false pretenses to give to other people. A legitimate multi-level marketing company provides a valued product in return for money, so there is no loss to the purchaser.
Below is a Wikipedia article on multi-level marketing for more information:
http://en.wikipedia.org/wiki/Multi-level_marketing
Below is a Wikipedia article on multi-level marketing for more information:
http://en.wikipedia.org/wiki/Multi-level_marketing
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