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Ten Questions to Evaluate a Network Marketing Opportunity

Feb 2, 2008
You are setting across the table from your friend, Michael. He's telling you about a business opportunity that sounds really exciting. It's network marketing which makes sense to you in principle. It's a new one which means the timing is great. How do evaluate the opportunity?

You are not afraid of the negative perceptions like, "it's a pyramid". You know that every successful organization and institution is a pyramid in one form or another. Your family, your church, the company you work for, and the government are all built in a hierarchy that resembles a pyramid. It one of the strongest shapes in engineering design. You want to build financial strength.

You've tried network marketing a couple of times, but, in one company the products were too overpriced for the value. In another, you were recruited but never received the mentoring or training you needed to be successful.

Still, you are interested in what Michael has to say. It's a new company, so you like the idea that you have a chance to catch the first wave - be one of the early adopters that everyone who comes later recognizes as part of the organization's leadership. So how do you evaluate the opportunity? Is this your chance?

There are 10 questions to ask yourself when evaluating an opportunity.

1.Does the company have a system in place to train and mentor you?

Training is one the reasons people say they were unsuccessful in network marketing. Without it many people will not succeed. This is true of any business. Training should be as much about developing character and leadership qualities as it is about learning compensation plans and sales techniques. It should be holistic.

2.Does it have a system to support you in training people you sponsor?

A good organization will have the materials and process in place to help you make efficient use of your time. If you have to develop your own training materials it takes away from your time spent mentoring leaders in your organization, recruiting, and other activities which keep your network growing and healthy.

3. Does it reward you financially for training people or are all the rewards for sponsorship?

Some companies have large sign-up fees where the money is made on new sponsorships. Healthy companies will reward you for growing your network in a way that focuses on healthy personal development of your people through training and mentorship.

4. Does it have products that are consumable?
Repeat consumers are the way to grow a business. Business built on expensive one time purchases mean that you are always on the outlook for new customers who can afford your product. It is often better to make the profit on consistent volume.

Consumable products allow you to grow by multiplication. When you have consumables, a new consumer is added to ongoing consumers. When you have one-time purchase products, you are growing by addition. Everyone knows you increase quicker by multiplication than you do addition.

5. Is it a niche market or a unique product with longevity?

If a product is not unique or of special value, then the reason people will buy it from you will be based on price, or convenience which means you have more competition. The more distinctive it is, the more people will need to come to you to get it.

However, be aware if the product is both specialized and popular, you may lose that niche. A few years ago aloe products were a network marketing niche that eventually made it's way first into health food stores and eventually went mainstream in major retailers bypassing the mlm businesses that introduced it. Choose a company that knows how to grow and adapt to changing market conditions.

6. Would you lose your business if you were temporarily unable to work it?

Some companies require high personal volumes every month or you stand to lose your compensation status and sometimes even parts of your organization. If you are sick or injured and can't maintain the status it can be a hardship. Some people buy products they really don't want or need so that they can maintain a level. That is not a healthy business practice.

7. How much do you need to invest to get started?

If there is an extremely high fee to get into the business, it often means that the structure is built to reward marketers for new sponsorships. That gets in the way of sponsors spending quality time developing their people.

Another reason for high entrance fees is that the product is a high ticket item which usually means it is non-consumable item that requires a new marketer to purchase one. These kinds of practices often put companies at legal risk.

8. Do you trust the leadership of the company?

Many leaders build their organizations on hype and get rich quick promises. You have to discern the difference between excitement and hype. There are opportunities that are worth getting excited about but, balance it with the concern you see in the leadership about issues like integrity, developing people, and true concern for the people in their organizations.

9. Is the organization in an uptrend?

With the right products, there is money to be made in all stages of the businesses growth. However, early adopters often make their way to top earning levels and top positions of leadership within the organization and a faster rate.

10. Are you willing to change?

All new businesses require time and effort. Any start-up business requires that the owners set their goals by defining clearly where they want to go. If they are wise they will learn from those that are already successful in a home based business, and do what successful mentors have done. It will require change on the part of the business owner to do this. Develop a hunger inside to change, grow, and be more than you are.

If you do, then network marketing holds the potential to provide the lifestyle and freedom you want, the character development you need, and the ability to be a leader in the context of your life. It allows you to have fun, make money and make a difference.
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 does consulting in communication and e-learning.He enjoys helping people successfully market their home-based businesses. TEAM 2.0
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