Network Marketing Programs To Work With – Pro And Cons

  • Sumo

If there is one system that has taken over the network marketing industry is for sure multilevel marketing (MLM). This is the kind of business that one has to buy a product from a given company and by word of mouth or working online refer others to the same product for a commission. In short, multilevel programs omit the middle men to directly reward their consumers using varies compensation plans.

Members of a MLM company earn cash when they make direct sales and also earn from overriding commissions made by the people they have referred. Usually, the extent of these overriding commissions varies from one company to another.

On this article we are going to tackle a pressing issue that most people who work online from home are facing when it comes to choosing a network marketing company to work with.

The first thing you need to do when you enter any business venture is to research well. As for MLM, you will need to make sure the company is not a ponzi scheme. This you can confirm by finding out if the program you want to enroll in has a product or not. A legit MLML should have a product or service, but go even further and ensure the products are of high quality thus easy to propose to other consumers.

Here are other attributes of an ideal MLM company you need to look at:

  1. The pricing of their products should be affordable depending on your financial ability and the people you want to target.
  2. Get to know if you are compensated for direct sales and your overriding commissions.
  3. Are there good channels for you to receive training and support from your up-line, and also for you to offer the same to your downlines?
  4. A good MLM program offers recognition to the top performers. The rewards vary but ideally the incentives include things like trips or maybe a car to motivate people to work.
  5. Check to see how rewards are measured, are they measured depending on your personal efforts or your groups efforts or on your personal monthly efforts?
  6. Know if you are compensated for sponsoring other people to the program.
  7. Find out how far the overriding commissions go, some network marketing programs pay up to infinity while others pay up to a certain level e.g. sixth or ten level.
  8. And most importantly see if the compensation plan is good enough to keep the company running. What would be the point of a great compensation plan if later the company was to collapse due to lack of financial sustainability?
  9. A good MLM venture has to have a way to take care of non-performing members.
  10. Stay clear of companies that call for dishonest marketing. This may include giving false information about the products and services on offer.
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A company may not offer all these things but it should at least have a big percentage of these attributes. These attributes make sure that the members make money working at home and the company also stays afloat.

There is also the other vital aspect of management. The companies that do well are usually managed by experienced and highly qualifies staff. This means that you need to know the top management and what they have done before to determine if they are good managers or not. Dig into their business back ground and that will help you decide if you will sign up or not.

A good multilevel venture needs to have adequate training programs. This training should involve coaching on the products on offer and the benefits the products have to the customer. This goes a long way to ensure members understand the product thus they can easily sell the same to others. This is also known as product knowledge.

Then the most crucial attribute of a good network marketing company is having a well organized compensation plan. Normally, there are many compensation systems and we are going to discuss some of them in detail.

Matrix Plan: Here you have some sort of grid where one is limited to the number of people in each level. For example a 2 by 2 matrix means you can only earn two levels down and each level will have only two recruits.

The disadvantage of this kind of payment plan comes when one has filled his 2 by 2 matrix and then introduces another person. In most cases the extra recruit may be put under your up-line or down-line. This also encourages laziness since some people will ride on other member’s efforts. It also limits on how much money one can make.

Note: The matrix plan varies, some are 6 by 6 other 10 by 10 but it all depends from company to company.

Unilevel: The one beauty of this plan is that it is quite easy to explain to people. Normally, members do not advance beyond a certain level. In some organization you cannot go beyond being a distributor even if you are performing exceptionally well.

The draw back with this kind of compensation plan is that it is not rewarding enough, which is a principle that multilevel companies should adopt to encourage sales. People feel motivated when their efforts are rewarded especially in public; therefore in most case some companies that operate unilevel plans later change and implement other payment plans that seek to motivate their subscribers.

2 Up System: This is a new concept where members are not paid for the first two referrals they recruit. Normally, the two are considered as people to enable you activate your account. The person that benefit from the two is your up-line.

The disadvantage of this is that most people may open dormant accounts hence led to non-performance. It is also difficult for members to understand how it works thus needs lots of training. But the good thing about it is that it can help you make money easily once your account is active.

Stairstep Plan: This system is like the advancement of the unilevel plan where members that perform well are rewarded by being promoted in rank. Unlike unilevel where the highest rank one can reach is becoming a distributor.

Ideally, in stairstep one moves a step ahead of his or her sponsorship level and the original sponsor is paid the overriding commissions of all the downlines. This in return helps to motivate members to work harder since the commissions are quite handsome and dependant on your efforts.

The plan has worked well and thus it is the system that has been adopted with most network marketing organizations. Also, government regulatory bureaus advocate for this kind of compensation plan since it is dependent on once performance and volume of sales made.

When it comes to training recruits it can be quite a challenge since it is difficult for some members to understand how the plans works.

All said and done, network marketing is the way to go for people who work online or offline. MLM’s are considered as the business programs that have made most people millionaires in the world today. This means you need to get on board fast if you really want to make money marketing.

The best network marketing program is the one that centers on marketing products or services as opposed to the program that focuses on one referring recruits.

Hope you succeed in your quest to make money from home using multilevel business programs.

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