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Is A Home Base Marketing Network A Recipe For Failure?

Dec 21, 2007
There are so many advertisements on the internet and in national magazines offering people the chance to make millions with their own home based marketing network that it is difficult to separate the real from the fraud. However, there are some companies offering viable alternatives to working for someone else in offering a home based business opportunity that generates a decent living.

There are multilevel marketing critics that contend the business model for multilevel marketing dooms it to failure regardless of the product or service being offered. By design, more money is promised for recruiting distributors with no regard on the how much the market can bear. Increasing the number of people selling a specific product will not necessarily increase sales, if the number of people wanting the product has been surpassed.

Most businesses understand the point of market saturation and the principal of supply and demand. When they have more inventory than the public wants, as well as the number of sales people that exceeds the number needed to sell the product to a reduced customer base, the business will end up dumping the product and doing away with the number of salesmen. The problem with most multilevel marketing companies is that no one is paying attention to how many people they have on their sales staff.

Another way to look at this is by doing the math on many companies' recruiting efforts. Offering rewards for new distributors, for example a $100 for each new group of 10 recruits and another $50 if those ten recruits bring in another 10. The second wave has brought the total number of distributors to 1,000 and if each of them bring in 10 new distributors there are now one million people trying the sell the exact same product as well as recruiting from a shrinking pool of potential distributors.

Consider the product may be something that everyone needs or wants, but keep in mind that not everyone will be willing to buy from this company. It could be customer loyalty that stops them from switching suppliers or a better price on a nearly identical item. It can be any one of a dozen reasons they choose to buy from a different source. While the market may not be saturated, as far as this company is concerned, the market of potential customers is almost dried out. If the focus is more on recruiting than sales, question the motives of building the network.

Before buying into a home based multilevel marketing campaign, separate the hype from the reality. When a recruiter lays out the line that it is something absolutely everyone needs and wants, it may be the truth, buy whether they will want it from you may take some additional research. Are the people in your upline, that is those who joined the program ahead of you and who will share in the profits from your efforts, really out to help you be a success but only hoping you can sell a lot of product in a saturated market so they continue with their lifestyle.
About the Author
Dustin Cannon, of Next Level Enterprises, LLC is a successful Internet marketer working with top leaders in the home business and Internet marketing industry. For more information visit: Start Your Own Home Business
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