The Real Problem with Network Marketing

HINT: It’s not the business model itself

It never ceases to amaze me the extreme polar views on the topic of network marketing and MLM. Some people are passionate about it in the extreme, and there are even top celebrity authors like Robert Allen, Mark Victor Hansen, and Robert Kiyosaki doing it and advocating it. Yet, in many circles, you might as well declare yourself a leper as admit to being in network marketing.So, what is the problem with MLM and network marketing?Maybe it’s the pyramid structure? But you can’t really take issue with the tiered compensation structure—almost every large sales organization in the world has that. Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that.Or maybe it’s the fact that you have to pay to participate in it? But that can’t be it—that’s a standard franchising model.

But those same things that make it attractive make it attractive to many who are NOT really qualified or prepared to become business owners. The salient characteristics of MLM make it attractive to people who:

• have not done well in their business or profession and have little money saved up to invest
• have no previous experience owning or running a business
• have no previous experience in sales
• have little or no experience developing business relationships other than that of employer/employee/co-worker
• are not satisfied with their current level of income
• have unrealistic expectations of the amount of work involved compared to the revenue realized

Don’t get me wrong—I’m not saying that there’s anything wrong with any of these things, or that this describes even a majority of network marketers—only that it describes a disproportionate number of network marketers, and that many of them never do anything about it.As a result, many network marketers end up:

• over-selling the opportunity
• inappropriately discussing business in social situations
• coming across as desperate
• over-focused on new recruits and neglecting existing customers as a result
• being either inaccurate or deceptive when talking about their business

Again, I’m certainly not saying that this describes a majority of network marketers, but itdoes describe enough of them to tarnish the reputation of the rest. To pre-judge someone based on the basis of a small minority of people in that group is horribly unfair, but we must realize that most prejudices have some basis in reality, even if it has been distorted.So what’s the solution?There’s a first time for everything. And network marketing/MLM is a great opportunity for people to have their first business, their first sales role, etc. My point is this—recognize it for what it is: it’s a business, and you are a business owner. And if you’ve never owned a business before, if you’ve never done sales before, if you’ve never networked before, you need to learn about how to do so, not just from the network marketing/MLM experts, but from established experts in those fields.Network marketers who are serious about building a business should be reading and learning about business fundamentals, the latest sales and marketing techniques, strategies for networking and business development, etc., not just swapping tips at your team’s weekly or monthly meeting. Act like a small business owner, and people will treat you like one.