7 Tips for Network Marketing Success A direct-selling expert shares what it takes to start out and make it in this industry.
By Devlin Smith
Opinions expressed by Entrepreneur contributors are their own.
This story originally published on May 4, 2005.
You probably have an image firmly planted in your mind of what network marketing (also known as direct sales or multilevel marketing) is all about -- housewives buying and selling Tupperware while gossiping and eating finger sandwiches, or a high-pressure salesperson trying to convince you how easily you can become a millionaire if only you and your friends and their friends and so on would buy and sell vitamins with him.
Both of these images couldn't be further from the reality of network marketing. It's neither a hobby nor a get-rich-scheme but an opportunity for you to earn money running your own part- or full-time business.
But what does it take to succeed in this industry? Vincent J. Kellsey, director of member services for the Direct Selling Women's Alliance, an organization that provides a variety of resources to women and men in the direct-selling industry, offers these tips for making it. Click through the slideshow to check them out.
ShutterstockChoose wisely.
There are six key elements you should be looking for [when selecting an opportunity]. Number one: stability. How old is the company? Number two is excellent products or services that consumers will use and need more of.
Number three is the pay plan -- how even and fair and generous overall is the distribution? This is really crucial as the pay plan represents exactly how you'll get paid -- or not get paid. There are really only two questions to ask [regarding this]: How many pennies out of each sales dollar get paid back to the distributors each month, and how fair is the distribution of these pennies between the old members and the new members?
Number four is the integrity of the company and the management. As much as possible, [investigate] the experience of the CEO, [their] experience in the network marketing industry, and their background. [Have] they been successful in other companies in the industry? Do they have a good reputation?
Number five is momentum and timing. Look at where the company's at, what's going on with the company, and if it's growing.
Number six is support, training and business systems. You may have [chosen] a great company with excellent management, products that make a difference, a pay plan that's uniquely fair and very generous and momentum and stability, but if you don't have a system in place that works, all of that [doesn't matter]. Most companies will have a transferable training system that they use, and that's where mentorship comes in.
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Practice what they teach.
[To succeed,] you need to be willing to listen and learn from mentors. The way this industry is structured, it's in the best interests of the [MLM veterans in your company] to help you succeed, so they're willing to teach you the system. Whatever [your mentor] did to become successful, it's very duplicatible, but you have to be willing to listen and be taught and follow those systems.
Evaluate the higher-ups.
It can be called various things, but the general term is the "upline," meaning the people above you. How supportive are they? Do they call you? Do they help you put a plan in place? Are they as committed to your success as they are to their own? You should be able to relate to [the people in your upline] and be able to call them at any time to say, "I need some help." How much support there is from the people above you in the company is very important.
Take the lead with your downline.
There's a term in the network marketing industry called "orphans" -- when somebody is brought in and then the person who brought them in is just so busy bringing in other people that they don't spend the time to teach and train [the new person]. You should be prepared to spend at least 30 days helping a new person come into the industry -- training them, supporting them and holding their hand until they feel confident to be able to go off on their own.
You really need to ask yourself, are you willing to do that? Are you able to do that? This is really about long-term relationship building. It's not about just bringing people into the business and just moving forward. It's about working with these people and helping them to develop relationships.
Make use of the internet.
People are utilizing [the internet] as their main marketing tool. [You can set up your site] with autoresponders so when you capture leads, the autoresponder can follow up with that person. One of the greatest keys to success in this industry is follow-up. Many people will have someone call them who's interested or they'll call the person and say they're interested, but then they don't follow up with it. Automation on the internet has allowed a much more consistent method of following up.
The only drawback with the internet is people who utilize it to spam. If there was one thing I could put forward to say "do not do" when utilizing the internet as a marketing tool, it's spamming, because that can give a very bad reputation not only to you but also to the company you're working with.
ShutterstockTake care of business.
This is a business, and just like if you were running a franchise or a storefront, you [should have an] accountant. You have all the same write-offs tax-wise that you have with running a [full-time] business, so it's very important to [do your research] prior to getting involved, before you start making money from it. How is that going to affect you tax-wise? What are your write-offs?
It's important to set up a [support] team around you. I'd suggest seeking out lawyers who deal in network marketing, so they're very versed in all the laws and how that affects [your business.]. There are also accountants who specialize in dealing with homebased businesses specifically in the direct-selling industry.
Don't quit your day job ... yet.
Never leave your full-time position unless you're absolutely certain that the income that's coming in with this company is going to be there. [Be sure that] you've been with the company [for awhile] and that you know it's a stable company, and the income that you're earning is equal to or greater than the income you're earning from your job before quitting.
