How To Choose the Right Opportunity

in Network Marketing

Let’s cover some facts about the mlm industry so when you’re out there looking for a home, you know you are in the most influential industry in the world.

Network Marketing is responsible for creating more millionaires in the last 20 years then any other industry.

Out of the top 5 nutritional companies in the world, because of the amount of distributors using their companies products, 3 out of 5 are mlm companies.

Out of the top 3 cosmetic companies in the world, number 1 and 3 are mlm companies.

The number 1 insurance and financial planning company in the world is a network company. In fact, this companies volume tops Prudential and Met Life and NY Life combined.

 The primary reason we have flat rate phone services today and not the 22 cents a minute  rates of yester year is a direct result of mlm phone companies. These companies have created such a huge demand and competitive market place, even the big 3 AT&T, Sprint and Verizon couldn’t compete with them.

Yes ladies and gentlemen word of mouth marketing is alive and well and becoming a huge source of service and vehicle of choice for many people around the world as their ticket to FREEDOM! Hopefully it will be yours too…

 

All too often I’m asked by networkers “ How do I know I’m with the right company?” My answer is this…  The question isn’t whether you’re with the right company or a good company. There are many even great companies in mlm. The question is, are you with the right opportunity?

You can be a great company without being a great opportunity. You can’t possibly call an mlm company a bad company after they’ve been in business for many years and are continuing to pay their people. However, are they a great opportunity? Well, do they have great owners, cutting edge products, an exciting compensation plan that actually works, a great story, great upline support, and the list goes on.

 

We’re going to cover these basics in choosing the right opportunity and give you enough knowledge so you’ll know that the mlm you are choosing is right for you.

 

One huge bit of advice before we start… Keep an open mind when reading this presentation. Your mind is like a parachute, when it’s open it works. It’s been my experience that too often we find ourselves in what I call a product trap company. It’s when a person is so emotionally involved in their product that they fail to see if that company is truly an opportunity or not. For example, is the compensation plan conducive for easy duplication or is it so hard to qualify to get paid you have to go through the gimme’s, gotcha’s, hoops, hurdles and headaches.

 

Let’s take our emotional hearts out of your decision making for just a short period of time while you’re viewing this webinar and let’s put our logical mind on first.

Part of what I teach in choosing the right mlm opportunity is making logical business choices first then back them up with your emotions, don’t make emotional decisions and back them up with logic. Give yourself and you family the best possible chance for success… You’re worth it!

 

 

Let’s look at point # 1 … The Management.

 

I talk about management first because you can have the best product, comp. plan and support in the world, but if your owners sell you down the river, all that other stuff doesn’t matter.

How do you know your owner/ owners are honest? Look at their track record How many companies have they started or been with. This is a tell tale sign of where their mind set is.

Do they have a history of starting then selling companies? Do they have a history of creating shady marketing tactics putting their distributors lively hoods at risk?

You may ask, How do I find these things out. Well, that’s why people like myself are here to help you. We act as an mlm resource for you to help you choose an mlm opportunity that’s right for you.

All too often owners start with good intentions then turn into egotistical I’m your boss like thinkers. They forget that we are a volunteer army and are attracted to their company because they create the feeling of appreciation that we volunteer to work for their company. If an owner takes a turn for the worse like this, it’s usually not too long before they find themselves losing their field leaders and trying to figure out what’s going on.

I’m not saying owners won’t make mistakes. In fact, the better owners in mlm will make mistakes in their quest to becoming a great opportunity. It’s how they handle those mistakes is what counts.

Do they wrap themselves around their field leaders in an effort to create the best master mind group they can, or are they associating themselves with “yes” people mentality.

Are they training their corporate staff to be appreciative and patient with the field. It’s been my experience that the mentality of the owners trickles down to the corporate staff… When the owners are coming from love and appreciation, their staff is usually of the same mindset.

A management staff that is departmentalized is usually a better way of running a company then having, for example, one head honcho. If this head honcho ever takes a “whacky” pill, it’s much harder to get things back on track vs. having skilled and responsible dept. heads.

Does this company provide great sales aides, awesome conventions, good customer service, a great web presence and excellent shipping?

Investigate the management of a company to find these things out.

 

Keep in mind that there’s no such thing as the perfect company. Even owners of the highest integrity for the field have it tough sometimes in staffing up especially when their company is really starting to fly. One of the most difficult tasks owners have is hiring the right people to help them run their company. That’s why so often I encourage people to not be hasty in choosing a start up just because they think the timing is so great. There are way too many risk factors in start up companies. You can hedge your bets big time by understanding the importance of being with a company with a proven track record but still offers a timely opportunity.

When a company has enough money behind it, it’s usually easier to hire the right people. I’d prefer you to consider a privately held company vs. a public one. When a company is privately held and hopefully as debt free as possible, it’s easier for the owners to make decisions for the field vs. making them for their board of directors in a publicly held company. The other factor I don’t like about a publicly held deal is they’re at the mercy of the stock market. When the markets down, they’re down and this may not reflect the truth of their performance. There are enough factors you’re going to have to deal with in mlm, and this is not one you need to worry about. In fact the trend of the industry is companies are buying back their stock to become privately held again.

One final point… A great mlm opportunity has little attrition on their management team. If you can find a company where the owner/ owners and management have been together for some years, you’re probably on the right track.

 

 

Point # 2… Products

 

Do you have a product or products? What I mean by this is, do you have a product that enables you to create a massive story around and provides you with “residual income”.

Most people get involved in network marketing to create residual income and yet many don’t understand what the difference between residual and sponsoring income is.

Residual income is the income you earn on what people use or consume each month. Sponsoring income is the income you earn when people come into your business.

So, it makes sense that if you want a residual income, you need a product that is consumed each month vs. a product that isn’t.

That’s why, regardless of what our emotions say, a nutritional product or products are your best products for residual income vs. service oriented products.

Not only will your group consume and even sell them, hopefully they are high quality enough to create excellent testimonies and many people on your team will use them whether they’re getting paid to or not, and that my friends is true “long term” residual income.

Let’s face it… if it’s not residual, it’s a waste of your time.

Some, non residual income or low residual income company’s ( I’ll call them companies because I can’t consider a non residual income or low residual income company an opportunity) spin their story around the emotions of people by saying things like, no more lotions, potions or pills.

And those of you who came from a product trap finally said, Thank God, no more of that only to find that you weren’t getting paid on the back end of your plan. Sure when the sponsoring was happening and you were making your training bonuses or up front bonuses things were great, but when the sponsoring slowed down and the amount you were getting paid on the use of the product was little to none, your incomes blew away.

Again, I make my assessments on logic and math not on what I think but what is real. The bottom line truth we all must understand in this business is “ Less is More”… That’s right the 5% money is more then the 20% money. The income you earn on the use of your team is ultimately more then the income you earn on your own volume or on the sponsoring volume of your team.

Plus, the concept of mlm was, is and always will be to work yourself out of work. How can you do that unless you have a residual income?

OK, we’ll talk a little more about this a little further into the webinar.

Let’s look at what’s essential for products in a great opportunity.

The trends right now are the liquids. Whether it’s a juice, or gel it seems that anything other then a pill is what people are looking for. This is called “the market dictates”. You can say all you want about the difference between pills, capsules, gel caps and liquids. If you find yourself swimming up stream when you’re telling your story you are now forced into a defensive mode and it’s way harder for you and YOUR TEAM to be excited about training people on nutrition and becoming these mini nutritionists vs. giving a person what they want. What does the mlm distributor market want… Simple and Easy. I take or drink this, share this and others can do the same. If you want testimonies, go to this website or this sales aide and by the way, if you don’t like it you can get your money back.

Believe me friends, I too understand the concept of great nutrition, but the proof is in the business. People have become so inundated with stuff over the years, they don’t know what to believe anymore. The simpler you keep it the better and the easier it is for your team to share and do the business.

Plus, think of the market share. If you have a product that can be consumed by the vast majority of people, say from infants to senior citizens vs. just people just looking to lose weight, you have much greater volume potential.

A major plus in having attractive products is to have clinical studies and a not so new trend but very effective marketing tool is for your company to have a very credible Doctor’s Board or Scientific Research Panel, commonly called a Medical Advisory Board. This is where you can plug your group into “ those people” for all the studies they’d ever want or need. Remember, like in life, perception is reality. Your company has to at least create the perception of knowing what their doing when it comes to products for people to be able to get behind that story. Hopefully you choose a company that has more then just perception.

A side note on mlm products… This industry is directly responsible for creating the market awareness in many product categories. That’s why not only will you get a higher quality product in most mlm’s, you’ll also notice because of this, we force many traditional non mlm retailers to improve the quality of their products.

For the most part, a traditional retailer can never have the quality an  mlm company will offer because they have to by cheap and sell at profit, where most mlm’s can afford to buy a little higher and sell, maybe even in some cases a little higher, but the quality is so much better and when it comes to what we are going to ingest, most people are willing to pay a little more. Don’t forget, your mlm company also offers you a way to get your products for free by enrolling others in your business! And nothing beats FREE!

 

 

 

Third Point…  Compensation Plan

 

Now we’re getting down to the nitty gritty of your business. Comp. Plans, in my opinion, are the number one reason people will either be able to make money or not.

This is a very important part in choosing the right opportunity, but unfortunately it is also the least understood by people coming into the industry.

Don’t feel so bad, most people, even in the industry struggle at understanding compensation plans. That’s why, especially companies with crumby plans will tell their people, “Don’t worry about the comp. plan, just do the business and you’ll get paid.”

Well, ladies and gentlemen I’m here to tell you that yes, there’s some truth to that but when you treat your mlm business like the million dollar business it is, you’ll reap the rewards of it. For example, how many of you would buy a traditional business without looking at the books? Not too many… so here’s my point.

When you understand the 4 basic mlm comp. plans, you’ll understand mostly all of them, or at least understand them enough to choose the one that works for you or at worst case scenario be able to consult with a person like myself about it in a non emotional venue so you can choose based on knowledge and not what your friend told you who knows less about it then you do.

 

There are 4 types of compensation plans used by every mlm in the world. They are commonly called: 1) Stair Step Breakaway, 2) Matrix, 3) Unilevel and 4) Binary.

Yes, there are 4 basic plans… I say basic because although all mlm companies use at least one of these plans, they are sometimes combined as well. We call combined plans “hybrids”.

 

For example, a company may have a binary front end and a unilevel back end, or a unilevel front end then breaking away into generational bonus on a part of the back end.

 

These terms front end, back end and break away, etc. are mlm terms ( lingo ) that must be learned if you are to fully understand compensation plans. The term front end is generally regarded as the sponsoring and/ or enrolling income and the back end is the residual income.

 

I’m not saying you’ll need to be a comp. plan expert to make a fortune in mlm… BUT IT HELPS!

 

Prior to the early 1980’s, we had the Stair Step Breakaway’s. The older mlm companies all have this type plan and at the time at least had their success. Although these are older type plans the companies that use these generally can’t change them because their leaders built their businesses based on these plans and if the company changed them, they would probably blow out their leaders incomes and that would result in that companies demise.

Needless to say, they are all in that somewhat of a catch 22 situation and have to make those plans work as best as possible.

 

In the mid 80’s we saw the introduction of the matrix. 

The early and mid 90’s were when the unilevels took effect and finally, more towards the late 90’s and into the 2000’s we saw the influx of binary’s.

 

Let’s look at the Stair Step Breakaway…

 

This plan usually requires a $100.00 active status ( personal volume requirement to get paid) and requires others to do the same. The whole point being, when you start the sponsoring ball rolling, one person with $100.00, then another, then another, your group volume starts growing.

Although there is generally no requirement to front load in this plan, most breakaway’s want you to get started with 2-5K dollars of products to become an instant manager or director or fleet star commander… Just some of the terms used for titles.

There are no width restrictions in this plan, meaning you can sponsor as wide on your level one as you want. When the volume in one of your legs ( personally sponsored people’s group) hits by or around $5,000.00 , that’s when that group breaks away from you, thus the term “breakaway”. Then the company requires you to have, depending what company it is, at least $750.00- $3,000.00 of “side volume” ( volume outside of that breakaway leg ) to qualify to get paid usually 5% of that breakaway volume.

 

That’s where, in my opinion, these plans fail… If you don’t qualify for your break away volume, that “generation” rolls up to the first qualified upline who does get paid on it.

 

There are 2 major problems with this: 1) People don’t like not getting paid, so they’re encouraged to: 2) “ side load” or “ garage qualify” themselves, to qualify to get paid or if they don’t qualify, usually for 2 or 3 months, that generation that is under them permanently rolls up to the first qualified upline and they lose their group or not… It may just compress up, so the qualified upline gets paid on it, then it gets put back under them, month after month, year after year, until they finally qualify for it or quit… Either way, the qualified upline gets paid.

My concern is that the qualified upline really doesn’t have massive incentive to help you get paid, because they get paid whether you qualify or not, and that my friends is not what I would call a win/ win situation.

 

The potential for people side loading themselves to qualify is so great that they probably do not have a lot of incentive to buy new product to stay active, so these companies highly encourage their people to retail out the product to basically get rid of it, which is better then getting stuck with it. It is true that the better companies have a return policy, but often it’s only 30 or 60 days and people don’t usually quit in that period of time, so…

 

Because of this, in the mid 80’s, we saw the introduction of the matrix…

 

This plan takes the best of the breakaway, approx. a $100.00 active status but leaves out the negative,… NO MORE BREAKAWAY. Commonly termed “ No more break away’s or take away’s.

 

The actual term matrix is referring to the limited sponsoring width requirements. For example a 5 X 7 matrix, means you can sponsor 5 people on your first level, then you have to start sponsoring people under people to help build your matrix… 5-25-125, etc. until you build a 5 by 5 matrix down to 7 levels.

 

Hey, how about that, no more breakaways, no more take away and the upline actually has to sponsor people under you… WOW!

 

The problem with this, well one of the problems with this, is it goes against the basic principle of teaching people how to fish vs. fishing for them. Sure, it initially sounds good that you’re going to get people placed under you, but long term this is proven to not be a working yourself out of work, by teaching people how to work concept.

 

That’s why, to date there are only 2 companies using this type of plan. Look at it like this, if it was so good many more companies would be using it.

 

The reason one of these companies is using this plan with decent success is because they were the first to implement it and a huge part of their recruiting strategy was to speak negatively about the bigger breakaway companies of that time.

 

I’m not a fan of “negatively recruiting” strategies, so to me, this is not a powerful way to recruit.

 

The matrix has other bells and whistles like perhaps car bonuses, advancement bonuses, the ability to go wide when roll up happens and other leadership bonuses, so you can make some good money with them.

The better plans in general will have a monthly compression feature which means if a person in your group is inactive, the person under them moves up a level and when this compounds throughout your entire group, this can mean significantly more volume coming up into your pay levels increasing your income, in some cases, by thousands of dollars a month.

 

In fact, a monthly compression feature is so important, I wouldn’t even look at a company unless they had one…  

 

These plans worked relatively OK, until the industry really got smart and came up with the concept of the unilevel.

 

The unilevel plan came to be in the 90’s and gave us the best of the breakaway (unlimited sponsoring on level one, without the take away and the best of the matrix, approx. a $100.00 active status to get paid on your organization).

 

We find that the best unilevels are those with “hybrid” type features.

For example: A ten level unilevel including check matching, 20% cash paid to the enroller on over 100 personal points and generational bonuses would be considered a “hybrid unilevel”.

 

Some other type unilevels are good plans but are, in my opinion, too structured and force you to place volume under personally enrolled people, whether they are leaders or not, in order to maximize your pay. They don’t allow you to tap into one of most important features in a pay plan and that’s called a depth driving feature. Being able to work with your leaders regardless of what level they are and still be able to count them for promoting you in title.

 

These “state of the art” unilevel plans are, in my opinion, the best comp. plans for consumable product companies They allow a person to actually consume what they’re active status is without having to load up on extra product to qualify for breakaway volume and when you add on the hybrid features, some of the largest incomes in mlm are being produced by them.

On top of that, when you add on monthly compression, roll up and customer volume counting as personal volume, you have the absolute best plan in the entire mlm industry.

 

Then we saw the introduction of the binary…

 

I’m going to try to keep this as simple as possible. The binary was introduced in the 90’s to combat the, what was thought of in that time, as the negative name recognition of network marketing.

The binary companies took pride in the fact that you only have to build 2 legs ( bi meaning two ) and you can potentially, note I say potentially, get paid on unlimited depth in your group, thus NOT considering themselves a “ multi level” company because in reality, there are no levels… Just 2 legs going straight down.

 

So how do you get paid? Good question. The original binary’s were what we call a 50/ 50 match binary.

You sponsor people on your left leg, then match that volume in your right leg and you get paid a percentage of that volume. If you can do this match weekly, you’ll get paid weekly. This all sounds good because, like the matrix, you must place people under people promising them that you’ll build their outside right leg and all they have to do is build their inside left leg.

So what happens now? Because most people never get their balance, the term “ binary blues” was derived meaning you would have a ton of volume in one leg and very little in another, so although you were being built under, you weren’t getting paid on it… Just shoot me!

 

My goodness… all that volume and not getting paid? Well then who’s getting paid on it? You got it, the few power upline and the company. That’s right, binary’s create the highest percentage of breakage to the company out of all the plans. In fact if you added up all the breakage combined in the 3 other plans they probably still don’t add up to the amount of breakage the binary companies keep.

The term breakage means the amount of money a company can pay, but because you didn’t qualify for pay because you didn’t match your legs, the company keeps the money.

That’s where you have the term flush and non- flush binaries.

The better binary’s, if you can say better, don’t flush the volume monthly and although they probably flush it yearly, they’re still considered to be non- flush binary’s.

 

We also saw the introduction of hybrid like binary’s with features like a one third/ two third match instead of 50/ 50. We even saw what was called a multi match and matching on the weaker leg binary. No matter how you slice it, you still have to match something to get paid… Remember that term I used in the beginning… Gimme’s, gotcha’s, hoops, hurdles and headaches? Well, this plans exemplifies that to the hilt.

 

The truth is, these plans worked best for single, non- consumable, product companies like the more service oriented companies or pre-paid calling card, travel and internet deals.

 

Once you start having to focus on consumable products, you have to take the focus off of the matching and it’s a catch 22. You’re either going to be too product driven, where your testimonies are, and probably not get paid, or too money matching driven and not create enough product loyalty.

 

In my opinion, although there are still some binaries out there, they are very difficult plans to create a long- term residual income.

 

Remember what that word residual means… On Going Income.

How can you have on going income without a consumable?

 

So remember this… Although these 4 types of compensation plans are probably a bit confusing to understand. Again, they can very possibly be the major reason why some very talented people can barely earn $40.00 a month, while others with a lot less talent can earn $40,000.00 or more a month.

 

 Let’s just say, it pays to choose a company with the right compensation plan.

 

Let’s Go to Point # 4… Timing

 

Some will say timing is everything or timing is the secret of the wealthy. Perhaps both are right, more importantly then that is when is the right timing for an mlm opportunity.

 

That is the magic question… Let’s consider this. Up to 80% of the people that choose an mlm company will either be looking for a new one or quitting the industry within 6 months. How about this statistic… 95- 99% of start up mlm’s will be out of business within their first year. So based on these facts, what does this tell us.

 

If you happen to be fortunate enough to be with the right opportunity from their inception, congratulations. You’re still going to go through the roller coaster of change but at least they didn’t go out of business on you.

I say this… Why take that chance. The best time to be with a successful mlm opportunity is after they’ve established themselves in the industry.

I’m not sure how long that is, in most cases it’s at least 5 years before they’ve perfected their comp. plan, product focus, sales aides and geared up properly for International expansion. Anything before that is a roller coaster ride of some failures and some successes. There are many people in the industry today that will enter a company at this time and will earn more money in their first 2 years then many people are making who have been there from the start.

How does this happen… simple. The people who were there at the beginning went through the roller coaster and lost people along the way. Those who got started when the company was established didn’t have to go through that and were able to maintain their organizations. You now can see why I’d prefer you to take a look at an at least 5 year old company vs. a start up.

What is this timing curve I see all the time?

The timing curve concept is a good one and I use it my own presentations but the truth behind it is you really don’t know when momentum will happen.

Many companies talk about it like it happens automatically at a certain volume level. Well, sometimes it does and sometimes it doesn’t.

It all depends on whether a company can keep the growth going, expand internationally properly, keep up with hiring the right staff, continuing to keep their story fresh and create a massive loyalty in the field that no matter what, they will stick with this company because they believe in the owners and upline and know that their vision is one of strength and integrity.

A side note on the timing curve… As you can see in this illustration, you have the formulation period of a company, when they’re going through their ups and downs. Then you have the concentration period, when they are solidifying their opportunity concentrating on their comp. plan, sales aides and system, then at around 50 million in sales you’ll see an upward turn to momentum, usually the best time to get started with a company and then at a certain level the opportunity will stabilize.

This is a critical point I’m making next… In order to keep the company moving forward, they must be able to expand internationally. Not every product or comp. plan can be taken over seas, so it’s very important for your company to have a universal product and seamless comp. plan.

As you can see in this next graphic in order to keep momentum alive, a company will create and re-create itself overseas for many years to come. This is essential for a company to be a great opportunity.

 

Now let’s wrap up with Point # 5… Support

 

Let me just say this… Supporting an organization is a talent that very few upline know how to do. Support isn’t just saying OK, go make a list and call me when someone is interested… Unfortunately that’s too common in this industry.

A successful uplines responsibility, which by the way is where the word sponsor comes from, is to support and mentor their organization. For a company to be considered a great opportunity, well let me say this, a company will never be a great opportunity without the upline providing fabulous support.

Look for an upline that is making money and not afraid to re-invest in their teams growth. Your upline should have a training system and in best case scenarios provide great tools like conference lines, online systems and even some sales aides.

Research your upline… See how long they’ve been with their current company. The last thing you want is a “jumpy junkie’ upline who’s going to try to recruit you and your people into every fly by night deal out there.

Although your upline mentors should provide you with the necessary tools, they also must understand the industry enough to know what to say and how to say it. There’s a certain mlm lingo that must be acquired and the last thing you need is an upline getting on a conference call and blowing out your team.

They must have the wisdom enough to provide cutting edge industry tools but also encourage new people to make a list and teach you how to teach them the basics of Contacting, Qualifying, Presenting and Closing.

Your enroller and upline must be 100% committed to their opportunity. That means they will travel when necessary and attend every company convention.

Remember that duplication starts at home. The way you are mentored will usually determine the way you will mentor others. You want to give you and your team the best possible chance for success you can.

I’ve seen people, on certain occasions, succeed in mlm without upline support but by far not as often as I see with support.

Make sure you do your due diligence when choosing your upline and enroller. An excellent upline organization will have the necessary industry knowledge to teach you the truth about this industry and the strength enough to tell you what you need to hear, not just what you want to hear.

You must also make sure you can be friends with this person. You are about to embark on the most exciting journey of your life. You want to make sure you journey with great friends.

Have the time of your life… You’re worth it!

Thank you for attending this webinar. Please get back to the person who referred you to this with any questions you have and please feel free to refer others.