You may not agree on every point discussed in this post. However, I am confident that once situations begin to reveal the symptoms of a problem within an organization, you will recognize the red flags as they emerge and see things from a different perspective. Naturally, in the future, you will want to teach these principles to your own downline and associates.
How Great of an Opportunity is It?
Often, a desire to change our lives lulls us into an opportunity that only lines the pockets of somebody else. This happens because there are experts in the field who know how to capitalize on your dreams, and they know how to present their programs so it appeals to you. They have you pegged the minute they begin talking to you and so they know what tools to use in manipulating you.
It’s true that sometimes an opportunity is as good as it appears, and yet other times an opportunity is a bad risk and you should not become involved with it. You have to weed through all the hype associated with the plan and scrutinize what they tell you in order to find the truth.
First, I must qualify myself. I’ve seen many people do well in their Network Marketing businesses. I’ve also seen many more who have not done well. I, myself, have done very well in some ventures and others I have not done as well as I expected. Nevertheless, I joined each venture believing that I would succeed and that it would be the best opportunity.
With that said, even when we are committed to the success of our businesses, it still may not work for us; possibly because there are holes in the plan that we did not see in the beginning (usually the holes are found in their terms and conditions). This is why we need to take the time we need to investigate an opportunity enough to know the truth or accept the risk. If we accept the risk, then what about the people we involve in the risk with us? We owe it to them to be sure that they will not be taken for a ride along with us that they were not prepared to take.
Take the Time To Investigate
The reason family and friends won’t join us in most of our ventures is because they know that we do not investigate opportunities well enough and so we get taken for a ride. Therefore, they won’t listen when we try to talk to them; they don’t trust us to know if this one is a good opportunity or not.
I’ve learned that, if we are unsure about the worthiness of an opportunity, we need to take some time to investigate it more thoroughly before we make a decision. Look at an opportunity with objectivity. This means we are less likely to be taken in by all the fluff and hype they use to rev-up a group or a crowd. However, if the promoter tries to apply pressure on us, it’s time to tell them goodbye. There is a reason for the pressure, and usually it is NOT for our best interest.
A mistake many of us make is we perceive a good followup as being pressure to join. We need to be honest when they call so they do not followup at a pace that makes us feel uncomfortable. We can resolve this problem by agreeing to attend their meetings for awhile and then make a decision.
Attending all their functions will acquaint us with the Association and the upline with whom we will be working closely. This is the only way we will find out who is making real money and who is putting on a front. Take note of how hard people are working and if they are running themselves ragged but seeing little payoff for it. My friend says this is like an airplane running down the tarmac and not having enough lift to take off.
Attending their meetings is a good way to find holes in the plan and learn more about the integrity of their organization. After awhile, they will no longer see us as an investigator but as part of the group; that is when the walls come down and we see the true integrity in their business dealings.
What’s the Gimmick or The Ploy That Hooks You?
I am going to get personal with you here because I want to be very candid about the pitfalls in Network Marketing—even the good ones.
Network Marketing is the best tool available today for average people to get into business and change their stars. Although there are many bad opportunities, there are still some that are reputable and have a viable business plan. With use of the Internet now, there are even greater opportunities to do well if one will follow sound principles when working it.
Below is a list of the gimmicks and ploys I’ve discovered that hook us into an opportunity…be it a good or a bad one. Perhaps some of you found many of these examples are true and can attest to what I’m telling you.
1 – Experts Look For Your WOW! The promoter’s objective is to get you to start dreaming or to wake up the passion inside you about your dreams. You need to have a reason for doing what they want you to do. They are looking for your trigger so they can capitalize on it. This doesn’t mean that everyone who taps into your dream has sinister motives. It just means they know you won’t do anything without having a reason. Your WOW is your motivation and, without it, you’re dead in the water before you even get started.
After a good promoter spends time finding your reason for taking advantage of their opportunity or building on your dreams, they spend time convincing you that you can do it. On the surface, there is nothing sinister about these motives. It is the wise thing to do, and this is what makes Network Marketing work for people.
Being suspicious of someone getting you to dream is not necessary in most cases; it’s part of the training so you can succeed. Talking with you about your dreams and ambitions gives them an opportunity to ask important questions that you need to consider and gives you a chance to look inside yourself to answer them.
It is completely appropriate, however, to be suspicious about their claims and the plan they promote. An honest promoter will tell you exactly what it takes to succeed in their business without resorting to a bunch of hype to sell you on their plan.
2 – You need to watch out for holes in the plan.
*Does the plan make sense?
*Are products too expensive for most people?
*What is the upfront cost to join?
*Where does that money go when you join? Some companies give part of your signup money to philanthropic organizations. You need to know the percentage and how much really goes out to those organizations.
*How are products being moved?
*How much product do you need to move to produce the volume from which they base each level of income shown in their presentation?
*If income is not based on moving products, then what actually makes you money?
*What is the risk? FTC laws say the opportunity MUST be the same for everyone, from top to bottom. If it isn’t, then it is a pyramid and likely a scam—which means that, most often, it will be shut down within the first year or so.
3 – NEVER JOIN an opportunity when you have to buy into a position: either by purchasing a certain amount of stock to reach leadership levels or they reserve a spot for you to buy a downline. If they bought a downline, then they don’t really know how to help you because they have not had to do what they are requiring of you. The promoter will tell you that this is the fast way to make money, and in some cases it could be true. However, I am telling you that this is NOT TRUE in most other situations and for most people! Let me explain why, because this is really the final straw that broke my own business.
Buy UP to a level:
When your income depends on monthly volume, it means your profit is dependent on products moving within your group. Stocking up on products is like shooting yourself in the foot.
For instance, you sell product “A” to someone (to an associate or a customer) so that product needs to be replaced (ordered) for it to count as volume for the current month. If you have the product in stock, you won’t make a purchase until the stock is low or gone. Without new volume going through your business every month, the money you need to restock is usually spent by the time you need to reorder. Also, you will likely do what many Network Marketers do in this situation—you bank on the fact that enough money will be there when it’s time to restock product “A”.
Do you see the error in this type of thinking? You are spending money today by banking on money being there tomorrow. You have faith or a belief that your business will grow and that you will have more than enough money to restock products then. In principle, it makes sense; in reality, it makes NO sense to stock up on products in order to buy up to a new level.
YOU MUST NOT BANK ON SPENDING “TOMORROW’S MONEY” TODAY, THINKING THE MONEY WILL BE THERE WHEN YOU NEED IT! If you break this Universal Law of Money, there will always be a consequence that follows. Even if the money is there when you need it, did you have to sacrifice something to make sure that enough money is in the account? Is that sacrifice your consequence?
If you need volume for a specific level, it means you and your downline must create it through movement of products. You do not create new volume unless you sell something and then order it for that volume to count in the current month. If you buy up or accept autoship (read this representatives experience with autoship), you will likely have a charge on your account that you can’t pay and so you will be cancelled.
Sponsoring new people moves products, but not enough to move you up several levels in volume. The way many opportunities work today is they require you to have a standing order every month by requiring you to have a product shipped to you every month or you will not qualify for a bonus from downline production (it’s called autoship) and your upline may get it instead.
If your downline buys products for themselves and their customers, along with the volume you create, and the total volume gives you enough for a new level, then all is well and everyone is happy. However, what if some of your downline decide to stock up on products as you did and they buy up to a level also?
Remember, your downline will duplicate you and usually that is a good thing. The problem with this plan is that now they have stock and you have stock. None of you will restock until products are gone or low enough to reorder. This system will work fine IF you and your downline work very hard to move the products you stocked up on and IF you can order new stock in the month you need new volume.
4 - Your contact list gives your upline names and phone numbers of everyone you know, which he or she can use as contacts after you drop out. Most new signups give up too quickly because they think the opportunity is a fast fix for their money problems or because they expect cash to come rolling in before they have given it enough time to expect that outcome. When people quit or are cancelled because of an unpaid charge, the upline scoops up the downline. Then the company sells the name
Sometimes upline will take ownership of your contacts and start communicating with them behind your back. Even if the upline has good motives, this does not edify you as the sponsor and diminishes your position with your new signup and your group. Some of them even sell your name as being interested in network marketing.
Your upline SHOULD ALWAYS work through you when there is ANY CONTACT with people on your list. This mistake is one I made in the beginning with my own business. I never did gain back the respect and trust of my downline after that mistake.
Keep in mind that your upline is doing this for a reason. Either he or she is looking out for his or her own interests, or he or she doesn’t trust you to handle your own prospects correctly. If your upline is doing this to you, then ask yourself why? Also, ask yourself if what your upline communicates to you and your downline makes sense and is it in agreement with sound principles? If not, then why and what do you plan to do about it?
Greed Is A Motivator
A devious marketer will try to appeal to the GREED inside every human being. We all want a good deal, and we all want to get something for nothing or for very little effort on our part. We know this is true when we think or hear ourselves say: I only have to do this much and I will get this much money for it. Do you see it?
In contrast, an honest marketer will spell out the plan, it’s weaknesses and strong points, and commit you to working the plan the way they know it works best. The plan will include a specific amount of effort in order to receive a certain amount of reward. Any plan that tries to say otherwise is a lie. All Network Marketers who have made it up the ladder know exactly what it takes to get there. Either they purchased downline to reach their level or they made it with hard work. You need to know exactly what hard work it will take.
DON’T make the mistake of basing your success on the success of those who are talking to you. You are not them and your circumstances are different. Your commitment level and work ethics are different. Your contacts and financial situation is different. Although all of this is true and very important to consider, you still look for holes in the plan that people want to hide. You need to understand the true success of those who want you to join them in the opportunity.
If you are seriously considering an opportunity, you must be bold and discuss these points with the person who wants you to do this plan. If the person is new, then don’t depend on them to give you the answer, go straight to the “horses mouth” and find out for yourself.
For example, you need answers to the following questions.
*How many clients do I need to see in order to get the volume you show in the plan?
*Is your success level based on the same compensation plan and the same presentation as they just showed me or did you buy your business from someone?
*How many “no” responses do you get compared to “yes”?
*What must I do every day towards reaching the levels that you describe?
*Tell the upline that you recognize your success cannot be based on others, but there is a figure required by law for them to disclose that tells you how many people actually make the levels discussed in the plan they showed you. Be sure to see their their terms of agreement. If it’s a long terms of agreement than run. The shorter their terms the more transparent they are.
If you set guidelines for yourself and follow them, you will be less likely to get mixed up in a “sinking ship” or a scam. Scammers depend on your vulnerability and greed. Protect yourself by understanding what red flags signal a scam. If it doesn’t ring true then tell them “NO THANKS”.
Good examples of red flags:
*Network Marketing companies that are ground floor opportunities or in pre-launch (pre-launch means they could be having financial problems so they plan on their reps to bring in the income because they don’t have financial backing)
*The Newest Book on the market on How to Become a Millionaire
*And the newest deal that’s almost too good to be true.
These are all questionable opportunities.
If you have questions about this article, I will be glad to respond to an email.