Ten Common Network Marketing Mistakes - And How To Overcome Them

1. Inflated Earnings Expectations

It is true, there are many millionaires in the MLM business. Well, there are also many millionaires in professional sports. Th question though is, how many schoolyard ballplayers make it to the professional level? I don't have to tell you, VERY few..

This is the case for earnings opportunities for network marketers as well. While the earning opportunities are unlimited, it is also a fact that relatively few, probably less than one percent, will ever make the "big money."

Statistics indicate that less than ten percent of the distributors in the business are full time. By and large, network marketing offers a great part-time activity for folks who keep their day job. Realistic expectations and goals for the average distributor should be an extra $400 or $500 per month as auxiliary income to their permanent job. Most network marketers who are locked into expectations of the "big money" will soon be disappointed and drop out. In addition, a sponsor who recruits other distributors with expectations of the "big money" will soon find that he or she has lost credibility with those that he or she has sponsored. In other words, be hopeful, be realistic, and your down line will likely be around for a long time.

2. Go For the Product, Not the Plan

Too often, network marketers are seduced into a program by promises of instant riches are held out as the result of compensation plans that are "break-through," "revolutionary" or whose payout guarantees instant riches.

In fact, history has demonstrated that no company has been successful on the basis of its compensation plan alone. It may get a jump-start and zoom like a rocket, but it will fall like a rock in short order. Of course, a fair compensation plan that provides good incentives is important.

3. Don't Think Short Term

The MLM business is like any other worthwhile endeavor. Network Marketers who look for success in the short term are preparing themselves for failure. Realistically, a network marketer should not be expecting to see the true fruits of his or her labor until at least six months into the business. Those who have been truly successful have been at it long term. Give yourself some time.

4. Easy Money, It is Not

Often times, the MLM recruitment pitch is one of "easy money." Prospective network marketers are told that they don't have to work, they don't have to sell, they just make lists and $20 bills will sprout wings and fly into their mailbox.

Those experienced in business will tell you that this is not an easy money "game." It is not merely a recruiting game. It is not a game. Network marketers who are successful know their product, know their customers, know the company's vision, and are prepared to do that which is necessary "hard work."

5. "Gimmicky" Product - Forget About It

If you're looking for an amusement park ride, go to the amusement park. Getting on to the roller coaster of a company with gimmicky "fad products" will yield a lot of ups and downs, but the ride will be over quickly.

6. Don't Ignore the Company Track Record

It is true that the "big money" is often made by those who get in on the "ground floor." And yet, for the average individual, the ground floor opportunity may be of little value if the ground falls out from under them in a short period of time. The success ratio of MLM companies is probably no different than that of other small businesses. For better or worse, there is a significant failure rate.

Therefore, a network marketer who is looking to increase his or her odds should pick a company with a track record, preferably a company that has been in business at least for a year and has demonstrated quality management. For those, however, who are not faint of heart, and wish to take the plunge at the very beginning, they should do some significant due diligence as to the principles of the company, their prior success in business, their infrastructure and talk to other distributors that are coming in on the ground floor.

7. Run Away From the "Front-load."

The company that needs to "front-load" distributors with unnecessary inventory will require substantial "cash investment" and is unconsciously sending a signal of failure to the prospective recruit. In a day of UPS and Federal Express Next Day Delivery, no distributor should be asked to carry large investments of inventory. The only true rationale for such a practice is to generate large sums of money for the payment of large commissions to "heavy hitters" who develop "recruiting machines." These programs are disguised pyramids and, when the recruitment slows down, the opportunity will also disappear.

Instead, look for a company that demands modest investment from its distributors and ask its distributors to purchase product in an orderly fashion for intended expectation of personal use or sale.

8. Look for Products with Profit Margins

Too often distributors are distracted by the compensation plan or the earnings hype to spend time looking at the profitability of the products and services sold by a company.

Services represent a significant future in the MLM industry, but such services as telecom or internet access carry a much smaller margin of profit. These are fine products, but a distributor who embarks on a career selling low profit, low margin services should be prepared for the fact that it will take a much larger volume of customers to achieve the same residual income as selling products with high margins. In addition, distributors should be careful to study the program and determine that the long-term future of the company is not built around the redistribution of high-priced training fees for distributors as opposed to the residual income from service sales.

9. Don't be an MLM Junkie

There are a few distributors in the industry who have developed the ability to "work" multiple programs. Those professional distributors are few and far between. Since the average distributor is part-time to begin with, he or she should carefully pick a company and stick with it. History favors the long-term committed distributor rather than the MLM junkie who hops from company to company to company. It is difficult enough to focus energy on one company and its products, let alone several.

Splitting your time and energy among several companies will probably yield thin results compared to focusing "like a laser" on one company.

10. Don't Sit Around

Activity is the name of the game in MLM. It may sound odd, but the expression "you snooze, you lose" is very applicable to this business. It is not enough to join the company, call all your friends at once, and expect the money to come rolling in. One of the worst mistakes a network marketer can make is to sit around rather than getting "proactive." The most successful network marketers are ones that are constantly recruiting, constantly selling, calling upon the same prospective customers and recruits multiple times, and reinvesting a substantial chunk of their commission check back into the business of recruiting and selling.