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Are you interested in multiple streams of income? Would you like to make a one-time investment and make money off of that investment for the rest of your life? Who wants to wake up on beaches and watch your money work for you while you’re sleep?

Have you ever been approached with these questions/scenarios? Have you ever been invited to a “business meeting” at a hotel on a Saturday morning? Have you ever been at a family dinner and your cousin popped in a 15 minute DVD explaining his new “business”? Have you ever asked what the business is and he responds “You gotta come to the ballroom on Saturday to hear about it”?

We’ve all heard stories or seen for ourselves the ups and downs of Network Marketing. For the record, I don’t think that they are scams. I don’t think that they are useless or not to be taken seriously. I’ve actually had a few friends make some money from these ventures. And by no means am I trying to offend them or their efforts. But I don’t think that Network Marketing is for everybody. And if it doesn’t work for you, it doesn’t always mean that something is wrong with you. It is a good concept that works for a small portion of the population. But for the rest of us, we are often left with this question of why or how didn’t it work for us.

Let’s take a look at some of the reasons why Network Marketing won’t work for you.

What is Network Marketing?

Simply stated, Network Marketing is taking advertising dollars that are normally reserved for print, television, internet and radio and rewarding those dollars to the common person for his/her efforts to promote the product. Billions of dollars are spent for ad space on the web, television, radio and in printed documents. The creators of these Network Marketing ventures lure in the common people by explaining this alternative concept and offering you an opportunity to make the money that would otherwise be spent on advertising dollars in a conventional sense.

Word of mouth marketing is great. We go to movies because our friends suggest them. We eat at restaurants for the same reason. But in the human mind, we are accustomed to responding to advertisements. Branding is very important to retaining customers. One of the latest Network Marketing ventures is the Organo Gold company, which is a Network Marketing venture that allows you to invest in your own coffee business. If you’ve encountered a friend who is invested in this business, they will ask you “What if I told you that you could’ve invested in Starbucks at its beginning, would you have done it?” And of course, your answer would be “yes”. And then they respond by telling you that this is your chance to invest in the NEXT Starbucks. Well, the difference is, Starbucks has created its relevance by the overall building of its brand. The interior of the store locations, the ability to walk out of your job for a 15 minute cup of “Joe” and the logo that pops up everywhere that you walk downtown all play a part in the love affair that we have with Starbucks. There has never been a “legal” product on earth that grew into a powerhouse by word of mouth only. Even “illegal” substances/products are promoted through movies, music and television. Advertising dollars will always been needed to promote a product. The human mind has been conditioned to respond to ads as well as word of mouth. The two go hand in hand. And there is no way that we can totally eliminate the need for ads in exchange for those dollars being in our pockets. Because the mind functions and responds to ads, we will always need them to promote products.

It IS a Pyramid

It may not be a scheme, it may not be a scam, but it is a pyramid. There is someone over top of you in the business and your job is to get several people under you in the business. And the money trickles down. It’s a pyramid. Yes, your job is a pyramid too. They have a point when they tell you that at that “business meeting” at that hotel on a Saturday. But, in life, there will always be someone ahead of you and someone that you’re leading as well. In the conventional corporate setting, you can make a jump in front of the person who you currently report to. In the Network Marketing ventures that I’ve been exposed to, that doesn’t happen. I was invited to a meeting once. I was once tempted to ask a Senior VP if I could sign up directly under him. I was curious of the response. I decided not to ask. But in Network Marketing, every business owner has a “tree”. And that “tree” when drawn out, certainly looks like a pyramid.

Just a side note, I think what’s always disturbed me about Network Marketing is that the leaders of these ventures don’t always come out with direct talk about what the business is. I would be more open if everyone was more direct about what is actually happening. But, they don’t owe me anything. The ones who are doing well, are probably doing better than me, so oh well.

Conspiracy Theory

We live in a society where secrets are scary. People are afraid of secrets. People are also obsessed with secrets. In today’s society, the discussion of “The Powers That Be” and secret societies has everyone questioning everything. So when you introduce someone to a business idea and they ask for more information, you can’t say “Oh come to the meeting on Saturday” and expect everyone to be open. People are also afraid of being “conned”.

Now, an advocate for a Network Marketing venture will argue that you have to get over fears. I agree. But when my friend, who last week, was struggling to keep commitments and hardly working is telling me that he can change my life, but won’t tell me how and he keeps talking about someone else’s Bentley that he’s never seen, I have a right to be apprehensive.

Relationships

Along the lines of the “Conspiracy Theory” section of this entry, relationships are important. I’ve seen people put more trust in a person that they’d met last Saturday than the people that they’ve known their entire lives. It just leaves a lot to be questioned. I remember being introduced to a Network Marketing opportunity by a good friend. The guy who my good friend was introduced to was also my mentor in the business. I my new business mentor on a Sunday. Two days later on a Tuesday he’s at my place doing an intro for my friends. We’d met two days prior. He took me outside and gave me an overview. He told me to edify him. He said that I should tell my friends that he plays golf 4 days a week and his day starts at 2pm. None of which I could confirm. I was totally uncomfortable with that. I’m not saying that is the standard for all mentors in these businesses, but I think that relationships are everything. I didn’t want to embellish the truth for someone that I’d just met, to impress my true friends. All things being said, this mentor in the business is now a friend of mine. And there was no harm done to anyone. But, I didn’t like that approach. In these Network Marketing ventures, you are often encouraged to trust someone who you don’t know, to win over people that you know. And that person in the business is often trying to make a sale at all costs. And the cost of your friendship with someone could be included.

People with great relationships coming into Network Marketing have better outcomes. I’ve seen many ventures like ACN, 5Linx, Amway and others. People who already have great business relationships tend to work well in these ventures. However, the hungriest people are often young, irresponsible and immature. And they walk in to the situation with a bad reputation. You’re 22 and you have just graduated from college. You can’t even remember to make up your bed at your dad’s house, but you walk in one day and explain to him how you’ll never have to work again because of a presentation that you heard at a Marriott. And because the business owners who mentor you encourage you to start with family first, your family is who you target. But, if you’re the kid who won’t wash your dishes or got a speeding ticket on a suspended license, who in your family will believe in you? When I attended meetings, I began to notice that the more successful people in these businesses have great family backgrounds and/or connections. It’s not always the case because there are exceptions to the rule, but it was a common place. The mentors in these businesses will encourage you not to sell the product. Rather, you should sell yourself. Well if you aren’t well put together, then that dream ends quickly.

If nothing else, these businesses taught me two things. The first lesson being, develop yourself before you ask people to invest in you.  You can’t hear a speech at a camp meeting and run back home charged and ready to take on the world. Gradually invest time in making yourself better. Show consistent growth and when you have an idea, then you can present it to those who are willing to invest. These business ventures taught me secondly how to maintain relationships. Nothing was weirder than asking people out of the blue for help. I signed up for ACN and I had to call family members asking them to change their phone service. That wasn’t easy. They loved me, but my aunts were afraid that if they changed their services and this unknown business went out of business, they would be up the creek. The people who actually changed their phone service for me were those who I’d kept in contact with. So I didn’t make any money, but I learned that you have to keep the lines of communication open.

Lastly, it takes years to rebuild relationships if you force people to try your “business”. You DON’T want to be the guy that people run from at the cookout. Under no circumstances do you want to be that guy. And when you never pull up in that Bentley as advertised, it takes years for people to stop talking about that. Money isn’t everything. Relationships matter. When you consider entering Network Marketing, keep your relationships in mind. People aren’t “lost”, crazy or slaves to Corporate America simply because they don’t want to sign up either. Maintain a balance and don’t let the venture get the best of your mind.

Must Be The Money!!!

Do you believe in cell phones? Do you believe in coffee? Is that what you want to spend your life talking about in the living rooms of strangers after work? At some point, it has to be about more than money. What I like about Network Marketing is that they encourage you to keep your dreams in the forefront and use that as your “carrot” to push forward. But I’m not that interested in talking about the different coffee beans and why you are better off drinking this brand.

Another side note: I’m absolutely turned off by the Bentley’s and other cars as promotional tools for the businesses. I’m especially turned off when none of my friends are pulling up or driving in them. I also hate the oversized/life-sized checks. And I hate how it always seems like my friends are the men standing next to the men, sitting next to the men. When will I see MY friends with the life-sized check for $100,000? Maybe they’re in need of me signing up for that to happen. Who knows?

As I said earlier, I think that those mentors in the business should be upfront and tell us what it is. “You may not become a millionaire, but you will earn some additional money”. If that were the marketing pitch, I’d be more attracted to that than an unrealistic vision of a Bentley.

You’ll Never Work Again

Residual income is making one business move and being paid consistently on it forever. So let’s say that you’re a singer. You make a hit song and you sign a contract that pays you every time that the song is played on syndicated radio stations. You recorded the song once and it’s played over and over, so you get paid over and over for an action that you performed once. Network Marketing promotes this concept. In Network Marketing, your residual income is only sustainable when everyone “under” you in the venture stays on board and produces at the same level. If one person quits, your residuals drop. So, you have to work to get other people to sign up. It’s sort of like that song that you recorded. If the stations stop playing the song, the royalty checks stop coming in.

But, let’s go back to Network Marketing. With other Network Marketing opportunities arising, you have to “work” to keep people motivated. So you don’t play golf all day and wake up at 12pm. You’re up on 6am conference calls and you’re out in someone’s living room at 7pm doing new presentations. You get breaks and I’m sure that some have time for golf in between, but you’re working. As for other Network Marketing opportunities arising, I’ve seen ventures rise and fall. And the people in your region who start within one venture tend to slide over to others. So you have to work and be aggressive. Sometimes your entire tree bottoms out and you have to start again. And oh by the way, the hungriest, immature, youngest and irresponsible people are the ones that you have to spend your entire day motivating. That’s a lot of work in itself. It’s certainly not a “Sitting on the beach and watch your money stack while you sleep mission”.

The Fee

I’ve always wondered why I’d have to pay a fee to enter the business venture, if the person signing me up is making so much money. I figured that since they are so excited about me starting, do me a favor and cover the cost of my investment. But as I mentioned earlier, advertising dollars will always be needed to advertise. We will never eliminate ad dollars and put them totally in our pockets for a return on word of mouth marketing. The advertising dollars that are paid by conventional companies is now paid by you when you enter into a Network Marketing venture. Dollars HAVE to be committed to advertising. If these companies don’t pay for ad space and commercials, how are they getting the word out? They get it out through you as the “business owner”. But when you initiate the interest in a new investor, you don’t close the deal. The prospective investors have to go to the hotel ballrooms, read through the materials and go to the websites. These all have a cost associated with them. The entry fees are the fees that cover those costs. So in essence, before you can make money from word of mouth marketing, you have to pay for other people to get a chance to see the presentations as well. But again, if I were told that upfront, I’d be more accepting of it.

What’s difficult is made to be simple, what’s simple is made to be difficult

It’d be much better if I could tell my friends what my business is about. It’s not that difficult. The secrecy and the reluctance to allow me as an investor to talk about what I’ve invested in makes me skeptical. On the flip side, it’s not easy to have 3 friends give me $500 a piece for an investment that I just heard about 48 hours ago, but I can’t tell them about myself. In Network Marketing, the mentors over-simplify concepts that are difficult and make simple parts of the business very difficult. There are rigid rules that you must abide by. “Listen to the leader” is always the mantra that is preached. But, from my observation, those that vary from the rigid rules are often as successful if not more successful as a result. Again, it’s hard to trust someone that you’ve met 48 hours ago over your friends. Make it simple. Let people tell their friends what’s going on ahead of time. It will save time, trust and friendships. The reality is, there is nothing that you can say to a person who is not open to the opportunity.

Just as another note: I am still open to hearing about Network Marketing ventures. People ask me the standard questions about extra income, being wealthy and residuals and I listen. I call the 1-800 number for the 15 minute call and/or go to the website to see the video. If I have a free Saturday morning, I’m still open to going to the “camp meeting” to hear the speech. I kinda like the speeches. They are great and I use them for my own good. I’ll hear the sales pitch and then kindly reject. But the key is, I’m respectful and I’m open. One day, an opportunity might come along and I’ll jump on it. But, it has it be right for me.

Conclusion

I want to be absolutely clear: I am in no position to force Network Marketing businesses to change their culture, strategy or approach. Let me reiterate that these are not scams, schemes or illegal companies. And also, there are people out there who have money to show for their investment in these ventures. And honestly, some of the greatest lessons that I’ve learned about life came from listening to those “camp meeting” styled speeches.

I wrote this entry to reassure people that nothing is wrong with them if the ventures didn’t work out for them. I strongly believe that there is a small population of people who work well in this culture of Network Marketing. I don’t think that they are better than us or more talented. They’ve found their niche and they work that niche very well. I’ve seen phone service, energy sources, travel packages, coffee and other products enter the Network Marketing culture. I’ve even seen ventures where you had to order your groceries online through a Network Marketing venture. And as new products transition their sales to that culture, people will flock. Many will fail and some will succeed.

If you don’t take anything else away, remember that the mind is conditioned to respond to ads and the conventional style of selling products. Also remember to invest in yourself. Do that so when you have an opportunity, you will be trusted by those close to you that you’d like to help you through their investment. And lastly, be as straight up about your ventures as possible.  Money comes and goes, but a good relationship is among the most valued commodities.