Most reasonable people agree that network marketing just makes sense. The opportunity to build a residual income off the sales made by an entire team, rather than having to rely exclusively on your own efforts, is certain to be a better strategy for the creation of wealth. Right?
So why is it that so few people are actually making money in network marketing?
I believe there are several key reasons, and that was the reason I developed the Networking Reinvented® approach and training system -- as a means of helping others -- not just my own team, but folks from a variety of different companies -- to finally achieve success.
I'll admit that originally, I considered making my system exclusive. But it seemed to me that the industry was so severely damaged by clueless "heavy-hitters", "top producers" and upline "leaders", that the only way I could help my own team achieve lasting success was by helping to educate, reform and revitalise the entire industry. And so the Networking Reinvented® approach became a grassroots effort, which was dedicated to helping every entrepreneur that wanted it to succeed.
I've been quoted in dozens of publications and blogs as having stated, "Network Marketing is dead!" And that is a statement I still stand behind. But I do believe that the industry can be "reinvented", taking the best of the best, and discarding those ideas, approaches and practices that either don't work, or continue to harm the integrity and credibility of the industry.
Over the past eighteen of the almost twenty-eight years I have been involved as a Network Marketing professional, and as someone who achieved the distinction of being among the top five-percent of income earners in that field, I have been hired as a consultant to eight of the top -producing companies in the industry, to advise them on ways in which to increase their marketshare, reduce their recidivism (drop-out rate), and remain competitive in the marketplace. Unfortunately, only two of the eight companies actually put those recommendations to work. Three of the remaining six actually went out of business, for all the reasons I stated; and another one of those companies is now facing a significant "crunch" in their growth and profit.
So let's look at some of the key factors affecting the Network Marketing industry today, and then focus on ways to turn things around for the individual entrepreneur.
MARKET CHANGES
The Internet changed our world. Not only were our day-to-day lives changed by the digital age, but entire industries were impacted by this new access to information as well.
In the 1980s, I was part of the first company to introduce herbal nutrition to the West, and the very first nutrition company to import herbal ingredients from Japan, China and South America. Our company went on to become a multi-billion dollar producer, and earned me a high six-figure income my very first year in the business.
Our success was simple. We introduced people through video cassettes, audio tapes, and later became the first company in the world to do television infomercials for our opportunity (on the original USA Network). We told people about the results we experienced on the products, and the results others experienced; invited them to a Business Opportunity Meeting at our homes or a local hotel; oh, yeah... and we wore the now iconic white lapel buttons, that said, "Lose Weight Now, Ask Me How".
Our leaders told us to distribute flyers, make a list of everyone we know, apply the "three-foot rule", always have inventory on-hand, and get to every corporate event. And we did just that, because it worked! In twelve months, I had a little over 7,000 members in my group, in several countries, and grew that team to several hundred thousand members worldwide, when I left that company in 1990.
Amazingly, if you look around the industry today, you'll find that the vast majority of "heavy-hitters" and "big earners" in the industry are still recommending the same approach. Oh sure, there are now self-replicating websites, which we didn't have, and there are weekly telephone recruiting calls, which we didn't have back then, but the general approach is still the same: making lists, bugging the people you know to get them to a call or hotel meeting, trying to sell the product to folks, handing out samples, DVDs or magazines... business as usual.
But this isn't 1990.
Many of us are familiar with three major health breakthroughs of the past decade: proanthocyanidins (grape seed extract); super-antioxidant juice drinks; and gel nutriceuticals. There can be no question that these three advancements in nutritional science, along with more recent advancements in understanding the role of glutathione, SOD and catalyst in the body, have the greatest potential for people to regain the health that is so lacking in our society as a whole. And the fact that most of us are familiar with at least two or three out of the above four breakthroughs can be attributed wholly to one source: NETWORK MARKETERS.
It was through the effort of persistent and dedicated Network Marketing professionals, and leading-edge manufacturers, such as Herbalife, Melaleuca, ForMor, 4Life, Agel Enterprises, Max International, MonaVie, Xango and Via Viente, that the global public began becoming aware of the health benefits from such ingredients as noni, acai berry, mangosteen, collostrum and glutathione. And initially, there was some decent money to be made by introducing these products to the marketplace.
But let's face it... the giant manufacturers... the ones who market their products in the healthfood stores, grocery chains and even online, have billions of dollars that most MLM companies lack. And when a product like these succeeds, and demand reaches a critical mass level, those manufacturers immediately create products with the same or higher potency ingredients, at prices that usually fall 60% to 90% lower than the MLM companies are selling them.
We've seen this happen with the super-antioxidant juice drinks. We've seen it happen with meal replacement drinks. We've seen it happen with every herbal supplement imaginable. And lately, we've seen it happen with gel nutriceuticals too. And that means one thing... loss of marketshare for millions of hardworking Network Marketers!
That's why I refuse to become involved with health and nutrition companies as a business. Now, understand this... if more of those companies would permit people like me to purchase the products I use and like occasionally, when I need them or want them, and without minimum monthly orders, inflated shipping and "handling" charges, and at prices that were more reasonable, I would be their loyal and dedicated customer. But like most educated consumers, I won't pay $60-$80 for a supplement I can get elsewhere for $29... I won't pay $40 for a juice drink that my local grocery store sells (in higher potency) for $15... and I won't consider businesses with such questionable practices to be sound long-term business investments... because they are not.
COMPENSATION PLANS
If you look at the historical progression and evolution of the Network Marketing industry, you'll find that the companies that have achieved the greatest long-term success -- that is, sustainable global growth for ten years or more -- have been companies whose compensation plans most closely resemble the almost identical structure employed by the insurance industry -- Unilevel Plans.
Ask any financial analyst to examine compensation plans in the Network Marketing industry today, and they'll almost universally warn against becoming involved in plans that were designed to cause distributors or "independent business owners" to "miss-out"... especially the "binary", "binary-hybrid" and "one/two-up" plans.
And don't be deceived by the "diversion tactic" by which a company promises "matching bonuses", because that is simply a mechanism by which they distract your attention from the unimaginable absurdity of not paying you on your "stronger leg", and requiring you to "balance" those legs in order to get paid.
There are only TWO groups of people making long-term money in those plans: the companies themselves, and the "heavy-hitters", who jump from company to company, moving their entire teams with them.
Recently, I discovered how a few of those most successful binary companies do the numbers they do, and attract heavy-hitters, who should be smart enough to realise what a risky situation a binary-plan represents. Two of the companies listed above asked me to come on-board to help grow their "top teams" business -- both of which had become a little "stagnant". I never agree to move my team from one company to another, and in 27.5 years, have never done so even once. But both of these companies arranged for me to have a "special call" with their top (company-sponsored) distributor.
On each call, I was told that they would put a minimum of $300,000 over a three month period of time, into my "strong leg" (the one I don't get paid on), in order to allow me to put "all my people" into the weaker leg, and earn on them. The idea was that I could then claim a HUGE first month income with them. And I recognised what they were doing instantly.
In fact, in the most recent situation, I knew that the "diamond leader" of their team, who was supposed to be earning $40K+ each month, wasn't earning close to that amount anymore... and he proved that to me, when he failed to be able to keep his pawltry obligation to pay just $1400/month in licensing and training fees, for which he was obligated, based on the marketing system self-replicating websites, multimedia portal and conferencing system we put into place for his people. Of course, he was already lying to his team, telling them he was earning $60K or more each month. But his entire team consisted largely of people he moved over from one of two previous failed MLM companies with which he was involved.
Another team created "superstars" out of virtual unknowns, when the internationally recognised "sponsor" moved his team from his previous business, and placed just enough folks under his buddy, to create a "stir".
And so it goes in company-after-company... making these binary deals look like they are thriving, but never really letting you see how relatively few people are ever earning more than a couple hundred dollars a month on their programs.
START-UP COSTS & AUTOSHIPS
The final two issues that will kill the long-term growth of any company in the new millennium are initial start-up costs and on-going qualications (or autoships).
The average start-up cost in the Network Marketing industry today is $850, which is obscene. Oh sure, the companies will tell you that "if you bought a McDonalds® franchise, you would pay millions", but the McDonalds® franchise also includes a 50+ year brand recognition, an existing demand for the product, and a proven performance record of similar restaurants in that particular geographical area. So the comparison isn't even germane to the discussion.
I wouldn't even recommend a company with anything more than a $200 start-up cost ever, and even then, only seldom.
And if a company requires a minimum monthly purchase, in order to qualify for commissions, then that minimum monthly volume, combined with the cost of their self-replicating company website, training calls, and access to the back-office portal must be $100 or less, or they are ripping you off. Period.
A FINAL WARNING...
The criteria above can be applied to any legitimate business opportunity, but there is one other precaution that must be taken.
Such programs as "safelists", "downline builders", "opt-in list builders", "link exchanges" and so forth, must never be considered to be "business opportunities". These programs may offer affiliate or referral commissions, and are very useful, within certain guidelines, as means of growing your contact lists. But the income from their programs ought to be considered as part of your on-going advertising revenue. None of these programs has withstood the test of time, and generally last 6-12 months or less. So understand their limitations, and use them with care.
REINVENTING THE INDUSTRY...
A BREAKTHROUGH APPROACH
Alright... enough looking at why the industry doesn't work well today, and why the typical marketing companies out there suffer from the increased competition, better pricing, and poor compensation plan offerings.
In life, my mentor taught me that we have to decide whether we want to be part of the problem or part of the solution... so what do we have to do to become part of the solution?
We have to first of all recognise the definition of stupidity is continuing to do the same things, and expecting different results!
If you are not earning the kind of money you were "promised" or "imagined" possible in your business, then you cannot continue to do the same thing, and expect to succeed.
BUT YOU SHOULD NOT QUIT...
Don't be so ready to jump ship... at least not until you've given serious and deliberate consideration to ways in which you might be able to increase your business, using the ideas I share with you! And that is especially true if you genuinely like the products your company sells. If that is the case, I can personally guarantee that if you use these ideas, you will, at the very least, always be able to afford to buy the monthly minimum purchase required, so that you're getting those products for free.
(If anyone is in that situation, there is a simple formula that can be applied to determine what you need to do to accomplish that. Just drop me an email at: successcoach@prosperityreinvented.com and I will walk you through the process.)
Succeeding doesn't necessarily mean that you have to quit the company you are with, and more times than not, you CAN succeed -- even if you made the decision to work with one of those binary or binary-hybrid deals. You just have to learn to stop doing what doesn't work, and begin taking a new approach.
NETWORKING REINVENTED® -- A BUSINESS OF RELATIONSHIPS
Network Marketing, at its best, is a business of relationships. That is why, one of the first things I recommend for every aspiring entrepreneur to do is to do a little "due diligence" and discover what works and doesn't work. And I always recommend that they do that from a third-party perspective.
I always recommend that they begin by reading a book that one of our colleagues wrote -- a colleague who is not involved in my business -- so they can be sure of the quality of information, and the lack of bias. When they read this free eBook, they'll find out why no one seems to care about their business opportunity... why "word of mouth" advertising is a myth... and why no matter how hard they push themselves, or how "motivated" they become, they still find themselves no further than they were one year ago.
And yes, I recommend that you take the time to read it too!
http://teamvision.the7greatliesofnetworkmarketing.com
SOCIAL NETWORKING... THE OPPORTUNITY MEETING OF THE FUTURE
Over the past several years, websites such as MySpace and FaceBook have grown to more than two million members. People are learning how to "social network" and are having a great time doing so! And there are some savvy entrepreneurs who realise there is a great opportunity to build their business on these social networks... but 98% of them are doing it ALL WRONG.
And so you'll find folks joining FaceBook, and every other day, they start a new "group" and invite everyone under the sun to join their group, from which they promote their program, add daily links to everything imaginable, and at the end of the week, have no new enrollments.
There are two social networks that I encourage everyone to join, and once you've joined them, to please consider adding me as a contact and colleague.
The first one is a site that is doing so well, FaceBook and MySpace have banned and continue to censor articles and posts that mention it. You can check it out, and sign-up for free at: http://join.zenzuu.com/prosperityreinvented
The second is a more professionally-oriented site, which continues to impress me every day. To join there, just go to:
http://www.6dgr.com/index.php?mode=join&refs_id=8412
(If asked who referred you, type in my username: networkingreinvented)
Both of these social networks are places in which you will immediately be able to add hundreds of people to your "circle of influence", and start meeting people with common interests, goals and business ambitions.
It's also a place where real leaders in the industry come to share their training ideas, build relationships and stay in touch with other leaders in the business.
And for me, it's a convenient place for me to be able to make myself available to help folks from other businesses to really succeed at whatever it is they're doing.
Now I know that a few of my colleagues are freaking out right now, because they see people like me, Brian Tracy, Robert Kiyosaki and other big names in the industry, plugging into these sites, and frankly exposing the reasons why some of those upline leaders don't WANT you to succeed. But more and more of them are warming up to the idea, because they realise that while someone like me will never join their nutrition company or binary program deal, I can still help their people achieve some level of success... and these guys know I'm "for real", when I say that the only way I can make this a better industry for me and my team is by making it a better industry all around.
In our next blog, we're going to talk about two of the most misunderstood ideas in Network Marketing...
"Always be Selling" and "F.O.C.U.S."
Stay tuned!
-- Dr. G
P.S. -- Don't forget to get your free copy of that eBook, by clicking here.
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For more than 27 years, pioneer in the field of entrepreneurism and emerging Internet marketing technologies, Dr. F. Gianmichael Salvato, has focused on the fundamentals of personal and business development, peak performance, and wealthbuilding in the postmodern marketplace. Recognised as an innovator, and called the "new mentor to the millionaires", Gianmichael has worked with such notable mentors as Jim Rohn, Lawrence Thompson, Anthony Robbins, Louise L. Hay, Dr. Kennedy Shultz and Dr. Jose Silva.
A noted Buddhist contemplative and teacher, Dr. Salvato has leveraged his achievements, as consistently earning within the top-five percent of Network Marketing professionals worldwide, using that income to fund programs for the homeless, the hungry, sick and marginalised, as well as providing education and support to underprivileged communities for more than 20 years.
Creator of the breakthrough approach Networking Reinvented® and developer of the Prosperity Reinvented® workshop series, and co-founder of the Networking Reinvented® Success Team, Gianmichael has shared his message with 3,400 audiences and more than a million people. He continues to conduct seminars, dharma workshops and business events throughout North and South America, the European Union and the Pac Rim, and resides with his companion and partner, in a quiet, understated historic home in Downtown Lancaster, Pennsylvania -- the oldest inland city in the United States.
Copyright ©2008, Dr. F. Gianmichael Salvato, All rights reserved. This article may be reproduced, blogged, quoted or distributed, provided the entire blog, including by-lines, contact information and this copyright remain intact. It may NOT be altered in any way, without express written permission.
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Dr. Salvato can be reached at: successcoach@prosperityreinvented.com
Find out more about his business opportunity by visiting:
http://prosperityreinvented.com/invitation
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