Replies to This Discussion

Permalink Reply by JonEdanger on July 20, 2012 at 5:06pm

I was a Direct Distributor in Amway back in the late 80s/early 90s. Made a modest amount of money. Knew guys who made buttloads. YMMV.

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Permalink Reply by Michael D. Denny on July 20, 2012 at 5:36pm

any suggestions on what to do if I go for it?

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Permalink Reply by JonEdanger on July 20, 2012 at 5:39pm

Commit. Believe in yourself. Plan for a lot of hard work. Plan for a lot of negativity from people you thought would support you. Plan for a lot of rejection.

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Permalink Reply by Native Son on July 21, 2012 at 11:25am

In other words, don't quit your day job just yet.

One typical recruitment device for the Network Marketing guys has been to set up a meeting at the coffee shop across the street from a high-end auto dealer...in the hopes that their mark will buy into the idea that after a couple of months with the 100% commission compensation, they'll be buying the big Mercedes for cash.

Been there, done that as the recruitment "mark".

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Permalink Reply by Nick H on July 21, 2012 at 5:03pm

Do they expect much money from you up front? An ex of mine was once considering selling kitchen knives for one of these companies. She decided against it once she found out the huge amount she was expected to pay up front for the "samples". 

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Permalink Reply by Mike D. on July 22, 2012 at 9:47am

I'm not in one so I don't have any first hand experience but here's what I know about them.

It's a business and not a job.  Don't do this as a way to make a little extra money for the holidays.  If you're going to get into this you need to get into it for the long haul.  You need time to build up a client base and build your down line.  At the beginning you'll be working a lot for not much money but as you build you make more money.  If you're going to get into it decide on a medium to long time period to give it an honest try.  Maybe a year.  Don't get frustrated and quit after only a month.

You get out of it what you put into it.  If you work 20 hours/week on this you'll be making more than if you do 10.  The more contacts you make the more product you sell and people you recruit.  Many network marketing companies get a bad reputation because they say things in their promotional material like "I make 100k a year and work four hours a week."  That may be true for that person but that is usually people who have been in for a while and have a steady client base that orders regularly and a strong down line that makes them a lot of money.  

Know the compensation plan before you get in.  As far as most of these go you're not in sales.  Don't make the mistake of thinking you're just selling a product to make your money.  That's a certainly a part of it but a lot of your effort needs to be in recruiting and training other people.  Your down line makes you a lot of your money.  How do you feel about that?  If you won't like recruiting you may have a problem.

I had looked a little at the network marketing side of Beachbody (they're the people that make the P90X and Insanity workouts) and one thing that was mentioned was "be a product of the product."  So whatever company you represent make sure you're using their stuff.  Don't sell Beachbody if you're sitting on the couch.  Don't sell Herbalife if you don't take their supplements.  Don't sell Pampered Chef if you cook with something else.

Have an honest discussion with your friend.  Ask him how much time he put into it.  Know what you're getting yourself into.  If he's a good friend I'm sure he'll be honest with you about what he's done and how much time he has put in, how hard it is, and what to expect.  Remember too that if you get in and you recruit it's in your best interest to be honest with people.  Don't waste your time on people that will drop out anyway because they had no idea what they're getting into.  It's better to take the time to recruit 'only' 10 good people and have 8 of them stick around than it is to recruit 20 random people and have 2 stick.

If you decide to get into it you may want to look at material by Jim Rohn.  He's a big name business philosopher/motivational speaker.  He made his money in Network Marketing and has a product about building your network marketing business that might be really good.  I've listened to a few of his other seminars but never that one.

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Permalink Reply by JonEdanger on July 22, 2012 at 10:59am

Your down line makes you a lot of your money.  How do you feel about that?

I can't speak for other companies, but in Amway your downline always makes more money on their work than you make on their work.

As for how you feel about that: good point. At the end of the day it's not any different than any other for profit business. If you have employees you should make a profit on their work. If you're not? You're doing it wrong.

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Permalink Reply by Mike D. on July 22, 2012 at 11:54am

I think I didn't say this clearly.  Jon you're right and I didn't mean to imply that the down line doesn't make their share of the money, they certainly do.  Here's what I meant to say more clearly.  

In many network marketing companies you make more money by having a large number of people under you and having them doing work and you receiving a cut.  A small piece of the action from a lot of people often makes you more money than a larger commission on you, a single person, selling.  Especially once the people below you recruit more people. If you recruit 10 people and they each recruit 10 people so that's 110 people.  Let's say you're making just 1% on each of those sales and everyone sold the same amount this month (just to make it easy).  Your commissions on your own sales aren't 110% (obviously) so it's clear to see that you'll make more money by having a large network than you will selling.

How do you feel about having recruiting and training be a large part of your time, not how do you feel about how it's set up.  I agree that there's nothing wrong with getting a piece of the action from people below you, and below them, and however many levels it goes down in that organization.  If you're doing it right you're providing your down line a service by training and answering their questions and yes that's no different than any other business.  If you don't want to train and recruit others into the business and only want to sell you'll never be as successful as those that do recruit.

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Permalink Reply by Fred Manning on July 22, 2012 at 10:06am

I watched Amway totally screw up a friend of mine's family when I was a kid.  It wasn't Amway itself, but the hustle required to make it work.  It's a lot of work and it takes a special kind of person to do and not come out on the other end as a greasy s-bag.

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Permalink Reply by David F. on July 25, 2012 at 9:21am

The thing about these deals is do they last long term?  Each new person signs up, pays for "training / access".  After that they sell like mad until their network is depleted.  However they get signing bonuses for recruiting.  

Stop looking at the money. Look at the product offerings.

Marry Kay is a company that does as above. HOWEVER has a wide and varied product line and distributors can establish long term supplier relationships with their network of friends and relatives. 

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Permalink Reply by Rick Shelton on July 25, 2012 at 9:42am

You HAVE to look at it as a business.  What is your market, do some market research for your area for the product(s) you will be selling.  Look at who you can sell to (spelled out by the NM company).  For example a particular high-end cosmetic network marketing company ties your hands because you can't sell to local beauty salons.  In fact the beauty salons cannot sell the product at the salon even if they become members. 

What is the market saturation?  Only so many people can sell product in one area, if too many people are already in 'business' (and doing well) then your market area is saturated.

Look at the up and down percentages.  In otherwords how much of what you sell goes to your up-level personnel, and what percentage of your down-level people's sales do you get.

Don't rely on down-level profit.  While you may bust your ass getting down-level people they need to sell product in order for you to make money on their sales.  Only 1 in 10 or more will be a true sales person.

Concentrate more on sales not down-level additions.  Yeah, you get an income boost when you add a person to your down-level, but much of that boost is short-lived as they are buying products to add inventory or because they are 'required' to.  After the initial buy they won't need as much inventory purchase and they'll have to sell what they've got, which can take a while.  Once you learn to sell the product not the company you can teach your down-levels to do the same, adding quality, not quantity.  I knew quite a few people who had 50 to 100 people down-level but their incomes didn't change much at all because everyone was selling the company and not the product.

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Permalink Reply by David F. on July 25, 2012 at 9:45am

Great post.  I would add one should figure out what their personal time is worth.

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