Adding another stream of income
One of the most frequently visited areas on my website has been the “Second Stream of Income” page.
The site was posted almost a year ago, however, in recent months and especially
within the last several weeks, the number of visitors to this area of the site
has doubled and the number of calls, e-mails and inquiries has almost tripled.
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Because of the present economic circumstances and based on some of my phone
conversations with cleaners from around the country, I’ve decided to devote this article to an overview of what to look for and what to
beware of when adding another stream of income.
The present economic climate in this country and the world has given birth to
all sorts of “opportunity hawkers.” Some are legitimate. Many are not. One of the opportunities to steer clear of
is the pyramid.
A pyramid is a fraudulent moneymaking scheme in which people are recruited to
make payments to others above them in a hierarchy while expecting to receive
payments from people recruited below them. Eventually the number of new
recruits fails to sustain the payment structure, and the scheme collapses with
most people losing the money they paid in.
Multi-level marketing (MLM), Network Marketing, and pyramid schemes are often
confused as being all the same thing. They are not. Pyramid schemes are illegal
in all 50 states. Here are a few ways to spot both an illegal pyramid and an
illegitimate MLM.
1. Pyramids make money by signing up new distributors while in network marketing
money is made by selling a product or service. In a legitimate program, product
must be moved before any money is paid. If more than 50 percent of the total
commissions paid out are from fees charged to new distributors, look for
another company to join.
2. In a legitimate company, your initial sign-up should be $500 or less. The
average fee is about $250 and usually includes a startup supply of products
that can be sold. You should not have to invest more than $50 for a basic sales
kit to become a distributor. No commission should be paid on sales kit sales.
If you are being asked to spend more than $500, be suspicious. And if the
company wants you to make a huge initial purchase, don’t do it. This is what’s known as front-end loading and involves filling your garage or basement with
large amounts of product that you may never sell or use. The only purpose this
serves is to generate commissions for your up line.
3. Products and services must be priced competitively. Many network-marketing
companies distribute superior products, so determining if a price is
competitive can sometimes be difficult. Be sure you are comparing similar
products. For example, if you’re selling a $30 bottle of juice, it should be distinctly superior to what one
can buy at the local grocery store or Costco.
4. Are the products or services you will be selling retailed outside the program
itself? If not, beware. This is a red flag. In a legitimate program, products
and services must make some sales to customers who are not distributors. The
mix of customers, which need to be outside the plan is up for debate depending
on which state or federal regulator you are dealing with, but current
percentages right now seem to be between 25 and 50 percent.
5. Check to see if the company you are thinking about joining has been accepted by
the DSA. The DSA, or Direct Selling Association, is the national trade
association of the leading firms that manufacture and distribute goods and
services sold directly to consumers. The association does its homework and will
not accept companies that practice shady sales tactics.
6. Find out whether the company has a history. Long-term stability is what you
should look for. Ten years is a good rule of thumb. Statistically, one tenth of
1 percent of network marketing companies actually make it to 25 years.
7. Check to see if the company has a buy-back policy. In other words, will the
company buy back inventory and sales kit materials from distributors who cancel
their participation in the program, as long as these items are in resalable
condition? If not, you may be getting involved with the wrong company.
8. Look for good training. Does the company offer its independent distributors
solid training opportunities in sales and recruitment? Are different levels of
training offered to match the increasing levels of experience and
responsibilities of distributors?
9. Lastly, look into the accessibility to leadership. See if it’s possible to gain access to the highest level. Being able to talk with the
leaders of the company is important. Not many companies grant that opportunity.
On the very day I joined my company, I received a phone call from an industry
icon.
Up to that point I had only heard and read of him. Next thing you know, I’m talking with him. And not just a short, “Welcome to the company” call, either. We talked at length. I ended the conversation but before hanging
up, he gave me his home phone number and encouraged me to call him whenever I
needed his help. Any, time… day or night! Is that powerful, or what?
The horizon is full of land mines. If you want to join a network marketing
company but aren’t sure which is legitimate, call me at (630) 602-4222 or send an e-mail to bill@
makmarketing.net
There’s no need to modify a prospect’s behavior… just re-direct their spending habits. There’s a good probability they’ll buy what you sell because they’re buying the same type of product already. Offer them something better and make
commission in the process!
