The Truth About Network Marketing

How many of you’ll have been asked by a friend to attend a presentation without questioning him/her?
“What is the presentation about?”
“Don’t ask so many questions, just come with me.”
Sound familiar? Chances are you’ve just been invited (or rather cornered into) attending a Network Marketing presentation.

Let me first say that I do believe Network Marketing is a genuine way to earn a living. And if you are good at it you will earn yourself a luxurious life not just a monthly income. So everyone out there who thinks it’s some kind of con game, it is a genuine business model… a very smart one at that. Unfortunately certain practices or ways of conducting the business have left it extremely misunderstood.

For instance, most network marketing companies tell you to refrain from telling anyone what the presentation is about. If you are asked is it network marketing or MLM (Multi-Level Marketing), you will probably be told to simply dodge the question. Why? If this business has changed your life and you believe that you are helping people earn more and live better by adding them to your circle, then why hide? Why not say, with pride may I add, that you are a Network Marketeer? This and many other small ways in which you are taught to conduct this business end up making people think Network Marketing is not a genuine practice and that’s sad.

Secondly, the failure rate is extremely high and ‘a case of sour grapes’ is most true for those who have failed in this business. Most of us exit the presentation with a very positive view about the whole deal. But as we start talking to friends, family and acquaintances, we hear a lot of negative feedback. “I tried it and I just ended up wasting money and time” or “My friend’s friend tried it and says it’s a complete sham” or “Have you lost it? All these Network Marketing offers are fraud”. Again, does any of this sound familiar? Well, how many of us question our friend’s opinions? How many of us ask them why did it not work for them? “Was it because you did not try hard enough?” or “Was it because your friend’s friend just didn’t devote enough time to succeed?” Strangely, these aren’t questions we even think of asking. This is one of the reasons why you are requested not to discuss the plan with anyone once you leave the presentation.

The other reason is that Network Marketing presentations involve understanding a lot of numbers. It may be simple maths, but it’s maths none the less. It takes months of practice and constantly presenting the plan over and over again for a person to put to rest all their doubts and queries about how the business works from an individual as well as company point of view. So if you ask your friend who has introduced you to the plan and who herself has joined only a few weeks ago, chances are you both are going to have a long discussion which will only end in confusion. The best idea is to take notes at the presentation, mull over it and ask the presenter the questions.

Talking about asking questions, most people don’t ask the right questions at the presentation which are anyways designed to leave you awestruck. Mind you, there may not be any lies in what is presented to you, but the story they narrate is of that small segment of Network Marketeers at the top of the pyramid who have succeeded. The presenter and several members will talk about how many people they have in their circle. But has anyone asked them, “How many drop outs do you have in your circle?” The failure or drop out rate in most Network Marketing businesses is almost 90%. So the presentation only represents 10% of Network Marketeers from that company.

Wondering how any of these companies survive and why is it a “smart business model” as stated earlier in this post? Network Marketing works on volumes. What I took from my extremely short stint was that drop outs only make the company more money. And the few that succeed continue to add to that pool of drop outs. Think about it, you can only join if you buy products from them. You are not an employee but a member. None of the Network Marketing companies give you your money back if you decide to quit. There’s no return or refund policy. So if you drop out, you lose and not the company.

Also, most MLM plans will pay you only after you have enrolled X number of people. and a far smaller amount than the cost of membership. Eg: You have to make a minimum purchase of Rs 100 to enroll and you will earn Rs 10 for every 2 members you bring in. But you will only be paid after you have signed up 4 members. Which means that you get paid Rs 20 when the company earns Rs 400. Need I say more?

So should you or should you not bother with Network Marketing? Depends on what the product in question is and what kind of a person you are. Which brings me to the questions you must ask yourself before you swipe your card. I wish I had asked myself some of these and actually listened to myself about some of the others. To read those 5 questions and the 2nd part of this post click here.


One response to “The Truth About Network Marketing

  1. Pingback: 5 Network Marketing Questions To Ask Yourself | An Open Ended World·

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