by Tim W Flowers
At one time, network marketing companies made a point of selling a wide range of products priced from low to high. No matter what your budget, you could find something you could afford, even if it was only a bar of bath soap. Amway, Shaklee, Forever Living, and many others built very successful businesses with this pricing model. They continue to thrive even to this day. But somewhere along the way a new pricing model emerged, promising bigger money up front but often failing to deliver.
This new pricing model, generally employed by younger companies, is based on the assumption that if a prospective distributor is serious about building a business, he won't balk at spending a few hundred dollars on a start up package that rewards his sponsor with a fast track bonus of $200 or so. Even worse are the companies that pressure you into buying their largest start up package, lest you be locked out of their highest bonus structure entirely. Along with the high start up cost came forced monthly autoships of products costing anywhere from $75 to $175 per month. Missing a single autoship could cost a distributor his bonus for the month and possibly put his entire business in jeopardy.
Many "heavy hitters" have jumped on board with these new high priced plans, but I don't advise you to join their club. Here's why:
Heavy hitters know what they are doing. They've been around the block, they network extensively, and they usually have existing downlines from earlier ventures who are eager to follow their upline to the next great thing. Companies with high up front costs are fantastic profit centers for experienced mlm'ers. Downline members that only spent $40 per month at their previous company are suddenly opening up their wallets for triple that amount at their new company, hoping to make the same big dollars as their sponsor. The trouble is, most network marketers don't have a large downline to migrate, so they're faced with the same uphill battle of recruiting that they faced before...only now the price of entry is much higher. Ask yourself: if you've had trouble selling a $15 bottle of shampoo, what makes you think you'll suddenly be able to sell a $175 start up kit of super juice? I'm not saying there isn't a market for expensive super juice, but it will be much harder to sell than a product most people can afford with the bit of cash they have laying on their nightstand.
The other issue is the monthly autoship. If you're making several hundred dollars per month in bonuses, paying $125 or so on forced shipments doesn't seem so bad. After all, we need to be a "product of the product" if we're going to sell the product. But statistics show that most people never make more than $50 per month as network marketing distributors. This isn't the fault of the industry so much as it is the lack of training and dedication of the distributors who often expect easy riches after the first month. But how long will you be able to hold on to your downline when they see what they're spending each month compared to what they're bringing in? You'll never have time to develop your distributors into heavy hitters if someone drops out every time an unexpectedly high cell phone bill comes in.
That's why I suggest you forget the promises of big payouts and build more slowly. Stick with the tried and true companies that let people join for free or for no more than $49. Reasonable autoships are fine but most people get nervous if the monthly cost exceeds $75, including shipping fees. And while that exotic super juice might be powerful, you need to be able to offer something to everyone, no matter how small their budget. Remember that signing up new distributors isn't the only way to build your business. Retail sales should make up a large percentage of your monthly income. I'll happily sell my neighbor a $4 bar of soap every month if that's all he can afford. If I have nothing to offer for under $100, I have no way to get in the door with my company and begin a long term relationship that could eventually convert into something much bigger.
Big ticket items have their place, but if you're not an experienced salesman with an existing, dedicated downline already in place and ready to convert over, you'll find it's a very tough path to travel. Building a business selling lower priced products takes longer, but in the end you'll have a large and stable downline that can support you for many years to come.
|