The Cold Hard Truth About Network Marketing

Network Marketing a subject that’s very close to my heart.

I run into people all the time, both online and off, with questions about MLM or Network marketing.

It it good?

Is it bad?

Is it a scam?

Is it worth it?

So I’m going to lay it all out for you, as I see it.

Since I’ve spent over 10 years of my life neck deep in direct sales, and since I’m not involved in network marketing myself, I do have some insights and a very objective opinion on it.

If you’re in network marketing, or considering joining a network marketing business, or if you’re simply curious about it, pull up a chair and let me give the scoop.

In case you don’t know I was involved very, very seriously in a network marketing business in the financial services industry for near 11 years, of which for almost 8 I made a full-time living. And unlike most people who ever get involved, I was actually successful with it.

I made money, got all kinds of awards, won trips to the most luxurious resorts in exotic places like Hawaii, Florida, Vegas, etc…

So let’s look at the positives.

Network Marketing Pros

The whole override structure of traditional MLM businesses is absolutely brilliant.

I mean people who call it pyramid schemes, are very ignorant of the fact that EVERY sales organization works off of overrides of their sales people.

Realtors, mortgage brokers, insurance agencies, car dealerships, retail store managers, EVERYONE who does ANY KIND OF SELLING where commissions are involved, there’s an override element of some sort.

Many moons ago when I worked in a carpet business, the company had many stores throughout the Mid-west. Clyde’s the division that I worked at, had 13 stores.

Each store had sales people who got commissions.

Then there were assistant managers, who got commissions on their sales, plus a .5% override (or something like that) of all the store sales.

Then there were store managers who got a little bigger override from the store.

Then there was Tom, who was a supervisor when I was there. I personally couldn’t stand the guy, he’d walk into the store and start yelling at you for no reason (great way to motivate people), but that’s another story for another time. Tom got a % of the sales of the entire chain of 13 stores.

So let me ask you…

How is that not a pyramid?

The point is that overrides are a natural part of every sales business.

And in a MLM/Network Marketing company, everyone gets a chance to move up and get overrides by building their own sales force, which is really brilliant and a great chance to build massive wealth.

So are there any negatives?


Network Marketing Cons

In spite of most leaders in a traditional network marketing company say, there is no perfect business.

In my humble opinion, one of the biggest negatives of a MLM company is that in most cases the commissions made on product sales are very small. So the only way you can make any significant money is by recruiting an army of people.

And recruiting an army will also not guarantee you any income, because you get paid when sales are made. So these people will have to go and buy products themselves, aka internal consumption. And/or they’ll have to go and sell products.

And this is where the big challenge comes in.

Most MLM companies do a very good job of feeding you with good “mental nutrition”, books, audios, seminars, retreats, etc… to help you develop a positive attitude, leadership skills, re-wire your thinking to be success driven, teach you goal setting, provide a positive environment which encourages growth and the entrepreneurial spirit.

And all those things are wonderful and are CRITICAL to your success no matter what you do. So if you think for a minute reading Think and Grow Rich and listening to audios isn’t necessary, you’re WRONG, sorry. These things are a must.

However, unless you know HOW to recruit people and make sales, you’ll never make money in that business.

And most companies don’t teach you HOW to do it.

What’s even worst, as it was in my case, is they preach that “you’re only one recruit away from an explosion”. Meaning it’s your recruits and downlines who’ll do the prospecting for you.

Well, let me tell you something.

The fact is, most people you’ll recruit will NEVER do anything. As a matter of fact, most people who you recruit that will do something like – show up to meetings, even go and try to recruit others, and show commitment, and even go as far as quit their job…

… WILL NOT DO MUCH, because eventually the toughness of the fact that most people quit, will get to them.

The truth is you’ve got to be one tough cookie to make it.

So this begs the question…

Is Network Marketing Good?

And the answer really depends on you. Is it good for you?

Are you willing to do everything that’s necessary to succeed in that business?

For some people the answer is yes, for others, there are other opportunities.

If you like working with lots of people, doing a lot of hand holding, training, developing, with the understanding that most people will quit… go for it.

Just understand what it will take for you to succeed in that business

I have friends who are making 6 and 7 Figures in MLM.

For me personally, spending over 10 years in that environment gave me the best street-level education in sales and human psychology. As well as helped me develop a very thick skin.

And helped me create the foundation I need to create other successful businesses and ventures.

Now, if you decide that Network Marketing is the way to go for you, great.

Here’s what I recommend.

5 Tips To Help You Succeed In Network Marketing

1. Pick the right company.

Do you due diligence, and make sure that you pick a company with a solid leadership team. That the actual people running the company have business experience, and the cash-flow to keep the company going. There have been plenty of cases when poor business decisions due too lack of good leadership caused companies to fail.

And the reps of those companies were left with nothing.

2. Sell products you can be passionate about.

I’ll be honest with you, when I started in that company way back when, I was only driven by money. But if I didn’t develop the passion for teaching people about money and helping them plan their future, I would NOT have lasted for over a decade in that business.

So if you’re excited about health, or travel, or financial services, or whatever…. make sure you it fits with what you’ll be promoting.

3. Make sure the products are good.

Ok, this should probably go without saying, but let me tell you, there are lot of companies that sell crap. Yet they get their distributors all excited about it.

I’m not saying to NOT trust in what the company says. But do your own research. See if the product is really good, not just because it says so on the company brochure.

Selling a good product will keep your future customers happy, and get you a lot of referrals. But selling a bad product, can quickly destroy your credibility, and in some cases even get you into a heap of trouble.

4. Understand the compensation plan.

You need to know exactly how you will make money, and what it will take for you to reach your goals.

You do have goals right? Just checking.

So if your goal is to make $100,000 a year… you need to know what it will take for you to hit that. Because going “out there” with pure excitement, and no plan for accomplishment of your goal is a sure-fire recipe for disaster.

5. Use a marketing system to build your business.

This is a biggie.

You see, in my old business, I was the one who did all the prospecting.

I cold called, knocked on doors, tried to strike up a conversation with strangers in mall… you name it I did it.

And I’ll tell you, it sucked. Lots and lots of rejection on a daily basis.

It wasn’t until 10 years later, that I realized you can actually use marketing system to find people. Believe me, this is a much better way to do it.

My good friend, created an entire system called Attraction Marketing, to help network marketers recruit people into their business without having to chase friends and relatives, and do it without any rejection.

In fact, you can sign up for his 10-day recruiting boot camp for free right here.

Got any thoughts or questions about Network Marketing?

Go ahead and post them below.

Next articleHow To Guarantee Your Success
Vitaly Grinblat has over 20 years of experience in sales, marketing and advertising. Including running his own financial services agency for over 10 years. Since 2005, he has created a number of information products online, as well consulted with and designed advertising campaigns for private clients, generating over $10,000,000 in sales. Currently Vitaly is involved in a number of businesses and projects including creating marketing campaigns for a large publication company, running an e-commerce business, a nutraceutical company and Success Thread.


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