Tuesday, October 25, 2011

Shocking MLM Compaines

Today I want to talk about another craze that is becoming quite popular in the MLM industry. Almost daily I am approached with another MLM company selling electric power. Most focus entirely on this as a company, and fall into the category of a One Trick Pony (link to my post from yesterday), which has its own set of issues. Others are existing companies who have jumped on the electrical power bandwagon. Either way, if you play with electricity, and you do not know what you are doing, you are eventually going to get a shock.

Let’s have a brief history lesson. This sort of explosion in the MLM world has happened before following the deregulation of long distance telephone service. There are some similarities here, and some big differences. Understanding these will help us get a better handle on this sort of company.

For starters, let’s look at how these MLM Companies did when telephones were deregulated. Much like today, with electric power, MLM Companies were springing up by the dozens, if not hundreds, trying to capitalize on this phenomenon. The biggest issue with this type of company, as well as the electric companies of today, is that they are only a reseller. Most successful MLM Companies have their own products, but this type of company, being a reseller, is at the mercy of the actual service provider. When that service provider changes prices, or other regulations are imposed, it can be disastrous. Such was the case for the long distance MLM Companies. In that case, competition drove the prices so low that there were no longer enough margins to pay commissions, and most went out of business. The few that survived were the ones who were ahead of the curve and jumped into other areas. 

Now, these two examples differ in one major way. In the 80’s, when long distance was deregulated, the laws of supply and demand took control. As competition increased, prices went down, and demand started to rise. With phone service, people were able to adjust usage as prices changed. With electric power, this is not such an issue. It’s not as if people will decide to leave their lights on longer just because prices go down a bit. Plus, prices for long distance were not tied to so many other factors. Even with electric service providers being deregulated, there are still many pieces of legislation on the books, as well as in the works, that can drastically affect the prices of energy. 

All the complex elements aside, the likelihood of electric prices ever dropping to almost nothing, as in the example of long distance service, is slim to none. The bottom line is, demand will not see the sort of increase with electric service, so prices will surely not drop. On the other hand, there are many other factors at work that cause some serious volatility. Between so much of the energy industry being traded on the Commodities market and the move toward sustainable energy solutions, not to mention politics, this is yet another type of MLM company that has a lot of potential both for fast income, and for disaster. If history tells us anything, it is that such companies can produce large income potential for short periods of time, but are not safe bets for the long term.

Have you ever made the wrong selection when choosing a company?  How did you come to the realization that you had made a mistake? Would it not be easier if you knew how to evaluate a company ahead of time? It really is, and I can help you. Start educating yourself today by reading "Success in 10 Steps". After you read this, I will send you some recorded training calls that will teach you how to analyze every aspect of an MLM Company, including one on the 5 Pillars to Success in Network Marketing. This is all free of charge, and you cannot get a better education in this industry anywhere, at any price. Trust me, I have looked.

Monday, October 24, 2011

Big MLM Tip - One Trick Pony

The MLM world is full of companies that fall into the "One Trick Pony" category. As a matter of fact, I would say that this accounts for a large percentage of MLM Companies. What is a One Trick Pony? It is a company that offers only one product or service.  You could widen this definition to include companies with a single product line. A single product might be okay to start, but more should be added soon. 

So, what's wrong with a single product company? We all have our niche, but a single product company creates a very narrow niche. This can put a serious dent in your number of prospective partners. 

For example, if your only product is a weight control product, you have cut your prospect pool down to only people who need to lose weight. While that is still a large number, it would be easier if you had a larger number of potential prospects to start with. Also, what happens when people use the product? In the weight loss example, either the product dose not work as promised, in which case people quit buying, or it does work, and people lose weight, and eventually quit buying the product. For MLM to work, it requires ongoing sales. If people stop using the products, for whatever reason, residual income is going to be non-existent. 

Now, there are companies out there who have several products listed on their website, but they would still fall in the category of a single product company. MLM Companies often times take a single product, then create a few different flavors and tell the world they have multiple products. The other way a company could fall into this category is by creating such a narrow variety of products they are virtually all the same. 5 or 6 products, all revolving around a particular ingredient, or all intended to have a similar affect, are the equivalent of a single product. 

The problem is, with a single product, or narrow niche, MLM Company is the field of prospective business partners. Face it; there are more prospective partners for a general nutritional company than for a company who focuses only on weight loss or some other narrow niche. Does this mean you cannot make it work with a Single Product MLM Company? Not at all. 

As with the most of this series, my intent is not to be overly critical, but to let you know what you have to work with. It is up to you to decide how wide a net you care to cast out.

Now, with that being said, this is where we enter the really critical part of this post. There is one other thing to consider when looking at a single product company. You have got to look at the company ownership, and where they got their start. Many of the single product MLM Companies out there are nothing more than an off shoot of a larger, outdated, flat-lined MLM Company. The original company starts seeing a lack of growth, so they find some new product, and launch a new company. Then, they pick the most active people from the original company and convince them to jump over to this new company. Sadly, the people in the original company just lost large portions of their business because their company stole them away. So, if they did it once, do you think they may do it again? Do you want your business stolen from you?

Friday, October 21, 2011

REALLY BIG mlm Tip - A Hot Commodity

I have written about publicly traded companies before, but what about publicly traded products? In particular, let us look at products that are traded on the commodities market. 

The biggest example of this is in precious metals. There have been several MLM companies come along lately that focus on this market. While there are several reasons I have reservations about this, let's focus on just one, the volatility of the commodities market. 

We all know what chaos it is on Wall Street (even when there are not protesters). Markets take huge swings, and make corrections and gains all the time. While it is true that staying the course nearly always leads to long term gains, how hard will it be to sponsor people when prices suddenly drop for one reason or another? Are you good enough to overcome that? 

Alright, I agree, gold has been going up and up for years. I have been hearing radio commercials trying to get people to invest in gold for over a decade. My question is, how long can that last? What if the price goes so high most people cannot afford the product? Worse yet, what would happen if the prices fell to a point where your team was losing money on all the products they had purchased previously?

Now, let's look at history for a moment. In early 1980, silver was all the rage. Financial gurus were making all sorts of predictions. Silver got to a high of over $47 an ounce, and many were predicting it would go as high as $100. What they did not realize is, the Hunt Brothers were buying up as much silver as they could in an attempt to corner the market. Several others, who followed their lead, bought as much silver as they could afford. Some were taking out a second mortgage to buy silver. Then, it happened. The Hunts, who owned an estimated 1/3 of all silver not owned by a government, sold it off, flooding the market. Once the selling started, everyone that was following their lead did the same, and prices went into a free fall, which caused a panic, and more selling, and the prices continued to fall. 

In the end, silver was almost worthless. 31 years later, it has still never reached the value it achieved just before the crash. 

My point in giving these examples is simple. Do you really want to base your future on a commodity that is so volatile? These types of businesses are really popular, and sure, you could build a nice income with them. Just be sure you know what you are getting into. 

Fortunes are made and lost on Wall Street every day. Do you want to be a day trader or a network marketer?

Thursday, October 20, 2011

Analyzing MLM Companies

Alright, I know I have not posted much in a couple weeks, but never fear. I will be starting a new series that looks at various types of MLM Companies.

This should be a good test as to who is actually reading my posts since some feathers are likely to get ruffled. All I can say is, if you read something in this series that sounds like your company, and it is not speaking favorably, then maybe there is a reason for that.

There are MLM Companies selling just about everything imaginable. It is entirely possible to buy almost every item you use on a daily basis from MLM Companies. You can get your groceries, phone service, vitamins, gas for your car, your investments and your electric power all from MLM. To borrow the iphone quote, "There's an MLM for that". 

You have single product companies, and then there are companies that offer so many products nobody could keep up with it all. 

Some MLM companies have comp plans that are designed NOT to pay, even though it looks good when written down. If you know what to look for, you can save a lot of time, money and frustration. 

Join me over the next few days as we look into how some different companies operate. All of this is pretty easy to determine for yourself if you simply learn about the 5 Pillars to Success in Network Marketing. ask me about them.

Friday, October 14, 2011

Leads Drone

There are a lot of lead generating systems out there. I will not name names, but you have seen them. While these systems are better than buying leads, they still have a habit of creating mindless drones. 

The biggest issue facing most of these lead generating systems is a lack of community. Sure, you can use some paid ads and pull massive amounts of untargeted leads, but if you are not building relationships, it is a house of cards. Even if a large percentage of these people did join you, which is unlikely, you better be prepared to build that relationship. 

1 on 1 is what makes the difference. Having training calls or webinars is a must, but if you are not working with people, 1 on 1, you will never develop leaders. You will have a group of distributors who have nothing tying them to you, and when the going gets tough, they will be gone.

If I had to pick just one piece of advice, and that were the only thing I could ever share, it would be this. Relationships are the key to retention. 

You may ask, "What if I have 100 people? I don't have time to talk to each one of them and coach them 1 on 1." How about when you get up to 1000 people? This is why it is so important to develop leaders. Nobody could keep up on their own. 

If you do not have a PROVEN DUPLICATABLE SYSTEM, then you might as well forget about it. Many of these "Lead Generating Systems" sound good, but how many businesses have really been built using that system. How long has this system been around? if some guy just came up with it last month, then how do you know if it's any good? You want something that is PROVEN and DUPLICATABLE. If you do not have both, don't expect much. 

But, don't worry. When your "System" crashes, I'll still be here. Shoot me an email, give me a call, message me on Facebook, or whatever method of communication works best for you. I'll be happy to show you what a real MLM Prospecting System looks like. Maybe you can even share it with the remnants of your team from that other thing and help them pick up the pieces too
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