Network Marketing — Good or Bad?

A reader recently asked, “Dan, what do you think of the concept of network marketing if the product is great and the training is exceptional?”

Well let me ask you this.  If I told you the new Ferrari 612 Scaglietti has exceptional safety features, rollover ratings, great re-sale value, above average fuel efficiency and sells for only $312,088 – would you run out and buy one?   Obviously there are other considerations, such as your driving interests and financial position, as there are in this reader’s question.  The primary issue is not is it a great company, with a great product and exceptional training – but rather, is the business model itself a “fit” for you?

If you are a natural cheerleader, always breaking the silence in the elevator, schmoozing at parties, inviting 40 friends over for a good time, and won first prize in your college debate class then you are probably a candidate for network marketing.  On the other hand, if you are reticent and shy, preferring to work with ideas rather than people and you get nauseous at the idea of standing up as a first time visitor in a new church, then this business model would be a total flop for you.  It doesn’t matter how great the products and the training are – it’s not a match.

You may be somewhere in between these two extremes, but the critical issue always is to choose a business model that “fits” what you already know about yourself.  Incidentally, I hope it’s a “fit” for you to grab this new Ferrari. ferrari-612

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13 Responses to “Network Marketing — Good or Bad?”

  1. greatchristianmovies.com Says:

    That’s true, there has to be a match, and also a passion.
    Nice car, by the way.

  2. Brian O'Keefe Says:

    Great advice! When I was in college, my girlfriend’s older brother, whom I greatly respected (and still do), convinced me to join into an MLM (multi-level marketing) that he was doing. He didn’t stick with it for long, but at least he was a very outgoing person. I, on the other hand, never mentioned the products or the “opportunity” to anyone and bailed out as soon as I realized that this was NOT a fit for me. I’m more outgoing now, but I’m still not a fit for this type of business.

  3. Chris Says:

    Dan,

    I love your advice, your blogs, newsletter, podcast, etc.! Anyway, I have to disagree with you on this one though. Personal Experience: I’m involved with a network marketing company and a training group that has been amazing. Here’s why I disagree: 1. God created people to connect. I’ve worked with hundreds of people. I’ve come to realize that, most people that are “reticent and shy, preferring to work with ideas rather than people” have a self-esteem or fear issues that are being managed. However, you find many people looking to isolate themselves and not “deal” with people. People get by all life, with the excuse, “that’s just the way he is…” As you know, 90% of success, in most professionsis, are typically based on people skills, communicating your ideas, selling yourself or service, etc.–even if you’re a guy who likes to write web code all day. I challenge you to point out anyone that has done anything great, significant in life, that hasn’t touched a great deal of people. I’ve seen my wife transform from a person who would turn red-in-the-face at a the thought of sharing, even in a small-group Bible study setting, to a person that is confident and a leader of women, passionate, servant leader. She even does the #1 thing people fear most–public speaking! The point of a training system is to change people. You change on the inside first, before you can change on the outside (financially or otherwise). The biggest mistake people can make when looking at network marketing is to think that it’s only for some people or a type of person–it’s simply not true. My mentor (who’s made no less than $30K per month for the last 8 years) was an engineer, in a cubicle. In fact, he’s the type of guy you described in your response to the gentleman who wrote you to start this thread. My mentor was changed over time and so can anyone else.

  4. Chris Says:

    Sorry for all the typos on my post above, I typed fast, gotta go!

  5. Joanne Says:

    This is not just an issue of personality style and being outgoing or otherwise but also an issue of price point. Typically most MLM products are more expensive than comparable products on the market and if one is on a budget, this can become an important issue. Additionally, in my own experience with MLMs, I became very disillusioned by the fact that the product was never stressed as much as just “signing people up!”……….that’s how you build a business……..sign up ANYONE who breathes and convince them the product is the BEST on the market……then prod them to sign up more people…. My own experience with MLM’s left me feeling they became very manipulative on many levels.

  6. Chris Says:

    Good thoughts Joanne.

    I can see how you can think price point could be an issue. I thought the same thing at first, but here’s something that helped me. Example: Use popcorn, for example. If you buy popcorn at 7 eleven you’ll pay one price, if you go to walmart, you may pay another. If you go to the movie theater, you may pay another for popcorn, and if go Disney World, you may even pay another (<: The question is, are is Target, 7 eleven, walmart, Disney World, etc., etc. providing value to the consumer? Are they asking a price that a consumer is willing to pay? The answer is yes. There is a reason why Target and Walmart can co-exist and both do well in serving their customers. Both are adding value to the market and both provide something a little different. For example, when you go to Walmart, which is an awesome company, you may get a great deal on a certain product, you may pay the same price you would any where else on another, and you may even pay slightly more for another.

    On the issue of “signing people up”: Most network marketing companies do have the opportunity to “sponsor people” and that’s the unique beauty of this model. I’d rather be a business owner, who has no employees, and can give a “piece of the rock away”–an opportunity for true ownership, rather than offer someone a job (and no they’ll never be able to create the type of income or lifestyle I have with their time and effort). Ultimately, if you do anything that impacts people, you’ll have to ask and rally help from other people. Dreams aren’t big enough if they don’t require other people to join the cause–no one is that talented. The ability to leverage your time and money is not unique to network marketing. Look at any franchise–could be a fast food type like McD’s, Papa John’s, a cleaning biz, or 100’s of others. McD’s goal is to expand to every corner of the world. Why? If you asked the Kroch family what their in the business of, I would imagine there would be two types of business: 1. Selling hamburgers to customers (B2C) and 2. Selling business opportunities to local franchise owners (B2B). Both sides of the business are equally important. If you know retail, especially food, you’ll know it’s so important to duplicate and start more stores because the margins are so tight, you want to leverage, leverage, leverage. Also, if you look at most people who create wealth, they’ve learned to leverage their time and money (where they are no longer limited to 24 hrs. per day). How many man hours do you think McD’s has in a day? Additionally, McD’s sells hamburgers at a price that is more expensive than you would pay if you simply bought the food product from a grocery. You can buy a whole sack of potatoes for the same price as a super-size fry, but people will buy! Last, one example I love, is a more popular industry–music. Look at Music. I’ll use a rapper that I’m not endorsing at all, but some people can relate to the music industry. Dr. Dre (a rapper) made millions selling rap, then he realized he that he’ll max out on his time and ability to create within himself. So, what did Dr. Dre do with all the experience and popularity he created? He “sponsored” or “signed up”, a young rapper looking for an opportunity, to a record deal. His name was Eminem, who I definately don’t like, but has made millions selling his product (music). What has Dr. Dre just done? Duplicated himself! Now Dr. Dre makes millions off his CD sales and when Eminem makes a ton, Dr. Dre also gets a little off that too! What does Eminem do because of the mentorship he’s received in the music industry? Eminem begins to go looking for other young people who want to be in the music industry and he “signs” an artist called, 50 cent to a deal. 50 cent makes a lot, Eminem now duplicated himself and makes a little. A lot of littles add up to a lot.

    I hope this helps with the price point issue and the “sponsoring” issue. If you look around in the business world, leveraging time and money is way to create wealth and it’s not unique. If you’re looking, give me a call some time! I have products that are competitively priced. Chris: 866-853-4462

  7. Milton Friesen Says:

    Maybe there is a balance here that needs to be noted. In some ways I agree with Dan, if it is not a fit for you, don’t get involved, and no, Network Marketing is not for everyone. Like Chris noted, it is true that a lot of people shy away from the things that will actually move them forward under the excuse that they are “reticent and shy.” And many will have to face those challenges for them to achieve what they were created for.

    However, I do believe that we are created with different gifts and abilities and maybe most importantly, different callings. And one of Network Marketing’s biggest weaknesses has been to sell a “one size fits all” business model. I do believe there are different ways to build this business, but there have to be at least some connections with what you do and what you were created to do.

    Personally, I believe in the Network Marketing idea, but I do not believe it is for everyone and I sort the people before I present to them, because there are some things that are required for success. I have seen people who were “cubicle people” and sucked at relationships achieve great success in this business, but it is only fair to say that these same people also first DESIRED to become that outgoing, good-with-people kind of a person.

    So here is my bit I try to live by: First BE, then DO, then HAVE. If what you have to BE in order for success in Network Marketing is what desire to BE, then start BEING it and you will HAVE success in this business.

    Sincerely,
    Milton Friesen
    Canada
    (519) 990-0220

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  9. Mike Says:

    MLM or network marketing I think is a really good, fast and legal way to earn a living – both offline and online. Too bad there are scams out there that smudge the good face of the industry. On the other hand, there are also those that are legit, some of which I’m a part of.

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