Monday, May 20, 2013

Five Reasons Why Your Network Marketing Business Will Fail

According to the Direct Selling Association, companies generated about $154 billion in worldwide sales (2011) through network marketing. In the US alone, nearly 16 million people operate a direct selling business and almost 75% of Americans have purchased goods or services from a network marketer. And yet, while many people successfully generate large - even 6-figure - incomes, the majority do not. And large numbers of distributors leave the business, with annual turnover rates over 50%.

With a broad range of products and companies to choose from, among the lowest start-up and ongoing costs of any business, the many tax advantages, and the ability to scale your business to the time you have to invest and the results you want to achieve, network marketing has a lot to offer. But there are many reasons why someone might fail at a network marketing business. Here are five of the most common ones.

1. You don't love the product(s). Network marketing, like any successful sales business, is based on trust and personal contacts and referrals. It is difficult in any case to sell someone something that you yourself do not believe in, but in network marketing it is - if not impossible - a horribly bad idea. If you don't use the product yourself, believe in it completely and feel genuine enthusiasm for what it does for you then others will naturally be suspicious when you propose it to them. "Be a product of your product" is a good rule to follow. Would you be using the product even without being in the business? Your enthusiasm will attract more people than your pitch.

2. Your expectations are unrealistic. Without a doubt, successful network marketers can make very significant incomes while having a lot of fun doing it. Five figure monthly incomes are not uncommon, although certainly not the rule. It is easy to get caught up in the enthusiasm of the business presentation and the excitement of getting started in a new adventure. The Grand Imperial Vizier level Diamond Executive Double Platinum Ambassador almost certainly invested a considerable amount of time and effort into building her business to that lofty level - years, most likely. There is nothing impossible about expecting to grow your business to a six figure residual income. But it is probably not going to happen by next month. Be sure your goals and expectations match the time and effort that you plan to invest.

3. You failed to carefully check out the company. You would not invest in a stock or buy a franchise business without doing your research first, so why ever would you start a network marketing business without checking out the company behind it? How long has the company been in business? Is it public or privately held? Who is the management team and what backgrounds and experience do they bring to the table? What do other distributors have to say? Is the company a member of any professional organizations like the DSA? Has it been a party to any lawsuits or complaints by customers or distributors? You get the idea. Caveat emptor.

4. You do not treat it like a real business.  If you want to grow your network marketing business into a serious income, you have to make it a netWORK marketing business. There is nothing at all wrong with wanting to make just enough income to pay for your own products and perhaps a little extra every month. Lots of people do. But if you treat it casually and regard it as a hobby, you can't also expect much in the way of financial success. You should plan to invest at least as much thought, time and effort into your business as you would into a job working for someone else - and, realistically, a lot more.

5. You refuse to be teachable. If you join a company that has been in business for some time (and, really, there are not a lot of good reasons not to) then it is reasonable to expect that they and their distributors have figured out how best to do that business. Learn from the people who have been successful, copy what they do, and teach the people you sponsor to do the same. It can be tempting to go off and do things your own way, but it will rarely pay off. Embrace the system your company has developed, make it your own and follow it.

Network marketing is a very simple business that doesn't take years of experience and a large investment to start and grow. But that doesn't make it easy (nothing very worthwhile is). Before you jump in, spend a little time educating yourself and your chances of succeeding will increase significantly.

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