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I must admit, I’ve been around block on Network Marketing. As mentioned in the previous post, I had a brief encounter with Amway back in the 1980’s – but that doesn’t even count. Since then I have tried other Network Marketing companies, including HerbalLife, EcoQuest, and Exponent Trading.
For a variety of reasons, none of these worked. The most significant of those is that I am not the type who can work the “Warm Market” or use the “3 Foot Rule” with any effectiveness. I’m not sure anyone can actually use those with any degree of success. I suspect the few that are really successful in those network marketing companies I left behind knew a lot of things about marketing I didn’t.
At any rate, I had turned my back on Network Marketing as recent as 6 months ago. It wasn’t until I stumbled across ITV Ventures that I gave it another try. What was different this time around?
Well lots of things really. Mostly my mindset. But the most important thing that brought me back was finding a Network Marketing company that actually worked. One that let me have a vision and a plan beyond bugging my friends, family, and co-workers. You can read my thoughts over at my ITV Ventures Home Business Blog.
The more I think about it, the more I realize that the old school of Network Marketing just isn’t going to work anymore. And I am not the only one who feels this way. So I have had a love/hate relationship with Network Marketing, but the love is back. This time a more informed love!
I can tell the age group of a lead or prospect by how they refer to Amway / Quixtar. When I am describing a network marketing company structure to someone they might say something like “Oh that sounds like Quixtar!”. In that case, I know they’re younger. Or they might say something like “Oh that sounds like Amway”. Then I know they’re older. Amway/Quixtar has been so pervasive that it seems like everyone has been exposed to it at some point during their lives.
My point of exposure to Amway came during the 1980’s, long before Quixtar and long before I was ready to accept the challenge of working seriously in Network Marketing. It was long before the internet, web 2.0, blogs and all that.
Pretty much all I remember about the experience was one meeting that was filled with happy, smiling, sticky-sweet nice people. It seemed like church although it was not held in a church. At the time, I was not spiritually inclined either, so this experience is merely a footnote in my life story.
I never tried Amway/Quixtar again but I certainly tried others. And getting back to my point about who calls it what, even that will change again! According to the Amway Wikipedia page:
…in June 2007 it was announced that the Quixtar brand would be phased out over an 18 to 24 month period in favor of a unified Amway brand worldwide.
Everything old is new again.
I just made that up – Product Wrap Around Syndrome. It’s where a Network Marketing company has products for sale, but just try to buy them without hearing about the opportunity! If you want the product, you need to get with the opportunity. The is because the opportunity is wrapped around the product! Product Wrap Around Syndrome.
An example of this would be Agel. I read up on their suspension technology and it seems to make sense. Looks like a product I might like to try. But just try to buy the product somewhere. I went to the Agel site. Nothing there but a showcase of product and of course the opportunity. There wasn’t even a “where to purchase” link.
So then I Googled “purchase agel” and the first few sites I found exhibited the same problem. The products were shown, this time along with the prices (retail). To buy them, however, it appeared that I need to sign up to be a distributor. One site I found had a preferred customer program where you could get the product, but you had to contact the person listed at the site first. Yeah, right. I know what would come of that so I never bothered. So I won’t be buying Agel.
This wrap around is so… Network Marketing 1.0 and it’s part of what gives Network Marketing it’s bad reputation. Unfortunately, it’s still very prevalent and Agel is not alone here. Few are the NM companies that offer their products as though they stand on their own without the opportunity.
PyramidSchemeAlert.org at first glance looks like a legitimate consumer watchdog site. But when you look closer, you see that they have nothing but vile and hateful things to say about Network Marketing in any form. They’re from the schools of “all network marketing is bad” and “all network marketing companies are pyramid schemes”.
They pick on Quixtar a lot so lets look at that. Way back in 1979, the FTC ruled that Quixtar (then in the form of Amway) did not qualify as a pyramid scheme. Now I personally would not get involved in Quixtar for a variety of reasons, but they certainly do not qualify as a pyramid scheme.
MLM bashers like PyramidSchemeAlert need to just get over it. They can’t quite see the difference between “scheme” and “structure”. All Network Marketing companies have pyramid structures but so does a bank, so does a car dealership, so does an insurance company, so does just about any company. Look at any organization, you will likely see a pyramid shape in their structure. The key to whether a Network Marketing company is a pyramid scheme or not can be found in the FTC document on the subject:
Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company’s incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company’s distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public (Source).
A legitimate Network Marketing company has good movement outside the company and does not require loading of products. This is something anyone should look at before joining a network marketing company.
Not only is PyramidSchemeAlert incorrect, but I question their tactics. I find it ironic that they accept PayPal donations. The basis of most of their arguments is that people in MLMs loose money. So … now they should then loose money giving it to PyramidSchemeAlert? Please. If it’s money needed to support their organization, there are ways to do that without scamming people into donating to them on the web. Since it’s a private non profit, I doubt if those donations are even tax deductible. Looks who’s calling the kettle black! I don’t have problem with a site exposing illegal pyramids, but I do have a problem with a site that tries to bunch all network marketing companies under this label (and then collect money for doing it)! Word.
Most indicators hint toward an upcoming recession. Unemployment is sneaking up, spending seems stable, but rather fragile and the Fed is toggling rates again. Of course this time there is the Subprime Mortgage crisis adding weight to the downturn. Is this bad news for network marketers?
No! Actually economic downturns are a great time to get into network marketing. It’s times like these where downsizing and layoffs occur at a more rapid rate. People begin to get tired of the layoffs or fear of layoffs and what seems like an endless cycle. It’s in times like these they are more receptive to the idea of starting their own business.
They may have had the idea on the ‘back burner’ for several years now, but when the economy goes south, suddenly the idea surfaces again. Your leads and prospects may be more ‘ready and willing’ to take on the responsibilities of a new home-based business under these conditions. There were will always be those who are just willing to ‘wait it out’ until companies start hiring again. Get a McJob until they can find something better. But there will more of those who will want to strike out on their own.
So ‘recession’ may be a dirty word everywhere else. But in Network Marketing, recession presents new opportunities and you can think of it as your friend!
I’ve started a new blog: the ITV Ventures Home Business Blog. I am not discontinuing this blog, but rather refocusing. I am currently involved with ITV Ventures, so naturally I find myself thinking about it a great deal. Rather than post my ITV specific thoughts in this blog, I will use the new blog. This blog will continue to be used for general Network Marketing topics and chatter not specifically relating to ITV Ventures.
