Home » Business » Network Marketing

Inherent Dangers Of A Network Market Opportunity

Dec 22, 2007
It has often been said in business that poor planning equals poor performance and the proof of this is in the many businesses that fail on a daily basis. From product manufacturing to sales and distribution, there are so many points at which a business can fail, it may be hard to predict when a business will fail, however by ignoring many of the variable aspects involved in business planning, it will be easier to project when it will fail.

In the old days of sales and marketing, a company had a lot of control over the size of their staff. It was not unusual for them to end up shorthanded due to a sudden surge in interest for their product. Sales associates quit, retired or were released for failure to perform. The company simply hurries to hire replacements and get them trained and hoped to keep them around for a while.

With internet marketing the danger is in the way the programs are designed. There is no protected territory in an internet marketing network and the entire world can be a sales associate's area of concentration. Sales has always been a cut throat business and in the global market place it always will be one.

If a company understand their customer base, demographics and size as well as location, they can make educated decisions on how many people they will need to sell their products efficiently. Many internet network marketing companies cannot tell you at any given moment exactly how many active distributors they have working for them and how many more they will need, or could they lose without seeing any loss in revenue. The startling truth is most network marketers never seem to think they have enough distributors and will constantly add more, even if their market for their products is saturated and everything that lands near their tree runs off with the rain water.

Having no clue of a product's sales potential makes it nearly impossible to project manufacturing needs as well as the size of their distribution network. If they make too many, they are stuck with an unsellable inventory, yet if they do not make enough they may improve a competitor's rating in the business. Sales associates may leave out of frustration by either not having enough product to sell or not having enough customers on whom to call. Planning as sloe to reality is the one aspect of owning any type of business that can help them grow or cause them to fail.

The network marketing business model is designed for failure since there are no limits placed on the number of distributors and nothing in place to determine the need for the product or long the company can expect its sales to remain in demand. The model also does not take into consideration any counterfeiting of the product by another manufacturing or one that comes out with a near duplicate product at half the price.

In either of these scenarios, the sales of the product will fall, distributor commissions will fall and the network marketing company begins traveling down the road to failure.
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: Passport To Wealth Marketing CoOp
Please Rate:
(Average: Not rated)
Views: 146
Print Email Share
Article Categories