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Six Barriers to Financial Success in your Network Marketing Business

Mar 20, 2008
You hear about a network marketing business. You would like to have the freedom, flexibility and the ocean of wealth that seems to be possible. Maybe you remember joining one before. Maybe you remember getting discouraged because the business had not grown.

You do not know if it is the business that did not work or if it did not work for you. There are a lot of reasons why network marketers are not successful. Most entrepreneurs do not get rich overnight if the truth is known, The failure rate among those who do MLM or network marketing businesses as a home-based business, may be at a rate that is that similar to that of real estate agents, insurance agents, and other people in business for themselves.

There are many reasons why a network marketer may not realize monetary success the first year or two. You need to consider carefully and make sure that your business allows you to go beyond these barriers.

#1 Training

Training is the primary reason many do not achieve what they need. There are three types of training that the beginning network marketer needs. 1. They need to understand MLM as an industry. 2. They need to know the content side of the business: the products, how to transact business; how to explain the compensation plan; and all the other details. 3. They need personal development in the areas of personal development, character building, communications skills, and relationship building.

#2 Being on the wrong side of a trend

Many products or new companies have a cycle they go through. They experience a meteoric first wave during the start-up or launch of a new MLM. This is what is often referred to as a ground floor opportunity. Then there is a second wave as the public catches on to the product.

If the product is unique or high quality and the company tells its story well, this stage may last a long time. Sometimes companies decline if they are not well managed, if the product goes main stream, or the culture changes.

#3 A business based on non-consumable products

Some people are not successful because their product is a non-consumable meaning that when people buy it, they use it and then need to buy more from you. Non-consumable product lines like vacuum sweepers, air purifiers, etc, mean constantly recruiting more customers.

#4 A discouraging compensation plan

Sometimes the compensation plan is stacked against the distributor and it takes too long to begin making money. This may discourage you from working hard, and it may mean that your downline, get discouraged and quit. Both of these keep you from financial success.

Look for a compensation plan that pays out in the neighborhood of 50% with no breakage. Breakage is when undistributed revenues go to the company rather than the distributors. Look for a compensation plan that rewards people early, for hard work. It doesn't have to be that much to help them believe that working the business is worthwhile.

#5 Focus on price as the main issue

Focus on the quality and convenience of your product. Many distributors discourage themselves out of the business because they believe their product has to compete with the local discount chain. Look at the customers who pay an extra 25% for beverages and snacks at a gas station when they are right beside a grocery where they could get it cheaper. Have high quality products and be proud of them.

# 6 Lack of commitment

It will not be successful if you do not do the work. Be committed to learn about the business and gain the experience you need to be successful. The rewards are tremendous, but you have to stick with it.

Conquer these six things and you will be well on your way to achieving the results you are looking for. Be smart, choose your company carefully, and then be trained and work until you know how to get the job done.
About the Author
Rick Hubbard - B.A. in Communication and Organizational Leadership and an M.A. in Educational Technology He is a media specialist at a university and a communication and eLearning consultant. He enjoys working with OceanGrown International (OGI) in its start-up.
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