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Network Marketing
Question:
>In looking for any type of network marketing / business opportunity there are
a couple of things that always make me nervous. >1. What is the amount of money that you are required to pay / invest in the
product ? After all, you are the one who are supposed to be getting paid for working for selling their product. Quite right. In the UK, there’s a legal limit of 75 pounds on the amount you can invest in the first seven days. In any event, no one should ever be made to feel obliged to purchase more product than they can sell easily. Of course, you would generally need to make an initial investment in some form of starter pack, which would generally contain some product samples and sales aids. In the best schemes, you don’t purchase anything you don’t already have orders for (other than the starter pack and replacement sales aids – which should be reasonably priced). >2. How do most people make money in this business? If the people making money
primarily sell memberships (and not the product) then I would start to wonder about it. I wouldn’t just wonder about it, this should set the alarm bells ringing! Of course, you’d expect that people who do successful team building, as well as selling products, will earn more than those who just sell products. But it should be possible to get a reasonable return from selling products alone. >There are plenty of other issues, but I think you get the idea. Under normal
circumstances, you shouldnt have to pay to sell a ‘great’ product when selling the product is supposed to make both of you money. Yes, but bear in mind that running a network business is a form of self-employment, and you’d expect *some* start-up cost. In this respect, the better networking opportunities compare very well against franchising, for example. Roger Jones
Response:
Dear Richard, It sounds as though you are looking for ammunition for a debate with your friend rather than legitimate information. I agree with you that many of the warnings you receive are legitimate and should be heeded, this is simply not the case with all network marketing. Your request for proper arguments which are simple to explain is impossible to fulfill without information on the company. If their information indeed is a legitimate marketing plan and not a pyramid, then you have no valid argument except that you are not interested. Out of curiosity, why are you intent on immediately arguing the issue, instead of considering the possibility that it might not be a scam and may well be the opportunity that your friend claims it is? I look forward to hearing from you, Tony Rush respond. – Hide quoted text — Show quoted text – > Hello Reader, > I know this is not the proper newsgroup for a question like this but > it’s > related. A friend of mine wants to trap me in a kind of a network > marketing > construction. It’s about selling consumergoods to people you know and > you > can earn (if you believe the story) a lot of money. > I’m often warned for constructions like this but I’m having a problem > with > finding proper arguments which are simple to explain to my friend > because > he doesn’t believe me right now when I warn him. > I know it’s all nonsense but can please somebody help me with the > right > arguments. > [Mod: Pretty simple. You have no motivation for it. End of > discussion.] > Much thanks, > Richard de Fijter > please reply also to: > because my newssoftware isn’t working too well. > [Mod: Do yourself a BIG favor and drop worldonline.nl and get an > account > with demon.nl I had nothing but problems with worldonline.nl]
Response:
>In looking for any type of network marketing / business opportunity there are a >couple of things that always make me nervous. >1. What is the amount of money that you are required to pay / invest in the >product ? After all, you are the one who are supposed to be getting paid for >working for selling their product.
I suppose it depends on the product. For the first time, after having seen all types of network marketing businesses come and go, I’m about to get involved in one. I actually have never ever done one of these MLM’s or network marketing products. I think I was the only person in the room who hadn’t. My upfront costs are: $300 per year for the service itself, (which I was going to buy even without getting involved in selling) $269 for training and startup $179 for a state government required license to sell the product >2. How do most people make money in this business? If the people making money >primarily sell memberships (and not the product) then I would start to wonder >about it.
In this case, you make the most money if you sell the product. But, if someone you sell the product to, chooses to also become involved and sell it, you get a commission on all of their sales. >There are plenty of other issues, but I think you get the idea. Under normal >circumstances, you shouldnt have to pay to sell a ‘great’ product when selling >the product is supposed to make both of you money.
I don’t know. If there was zero cost to get set up, there would be too many people who "just want to give it a shot" since they have nothing to lose and no investment. McDonald’s could still make millions without franchise fees because of the money they make selling the product and supplies. But the "right" to sell the product also has a value. — McWebber http://McWebber.Com/ http://www.scuba.to/ ICQ#6421403 Newsgroup postings are not an invitation for mail You Spam Me – I Report You – Do Not Send UCE
Response:
In looking for any type of network marketing / business opportunity there are a couple of things that always make me nervous. 1. What is the amount of money that you are required to pay / invest in the product ? After all, you are the one who are supposed to be getting paid for working for selling their product. 2. How do most people make money in this business? If the people making money primarily sell memberships (and not the product) then I would start to wonder about it. There are plenty of other issues, but I think you get the idea. Under normal circumstances, you shouldnt have to pay to sell a ‘great’ product when selling the product is supposed to make both of you money. Bill Meador, CPA Mir Fox & Rodriguez CPA & Consulting www.mfrgroup.com
Response:
>A friend of mine wants to trap me in a kind of a network marketing
construction. It’s about selling consumergoods to people you know and you can earn (if you believe the story) a lot of money. >I’m often warned for constructions like this but I’m having a problem with
finding proper arguments which are simple to explain to my friend because he doesn’t believe me right now when I warn him. As the Moderator points out, you’re not motivated by your friend’s offer. However, that doesn’t fully answer your query, does it? What you’re after, so far as I understand it, are counter arguments, to use in persuading your friend to cease *his* involvement. While it’s right to be cautious about anything you’re offered, just because a particular business is based on the network model doesn’t *necessarily* mean it’s a scam. There are, in fact, quite a few perfectly legitimate network marketing type businesses out there, and there are also a number of scams which might appear to the uninformed to be network businesses, when in fact they’re not. There are some questions you, or your friend (or anyone else offered a networking opportunity) could ask, to establish whether it’s legitimate. I don’t know the position in Holland, but in the UK, most legitimate network businesses are members of the Direct Selling Association, which enforces strict ethical guidelines. I’d think it likely that there would be comparable organisations in other countries. Also, in the UK, there are some legal requirements, including that the following warning must be brought to the attention of anyone offered a networking opportunity, before they sign up: "Do not be misled by claims that high earnings are easily achieved. It is illegal for a promoter or a participant in a trading scheme to persuade anyone to make a payment by promising benefits from getting others to join a scheme". You could also ask about the Company which promotes the scheme – how reputable are they, do they have a stock exchange listing, that sort of thing. What do they charge to join – is it reasonable? What do you get in return? – Reputable organisations will provide a higher value in their starter pack, than you’re paying them initially. Do they expect you to buy large stocks, or expect you to purchase a minimum amount per month? If they have such restictive requirements, avoid them. I’m not going to offer you counter arguments against networking per se, because there aren’t any. There are quite a number of arguments in favour of the network model (when properly applied) including the observation that people actually like to be able to purchase products in their own home, from people they know, rather than from some faceless organisation. Also, network businesses do offer people the opportunity to work for themselves, with a far lower start-up cost than would be available in any other business model. And, yes, people *can* make very good incomes from network businesses, but, as with anything reputable, what you get out is directly related to what you put in. Best Wishes, Roger Jones
Response:
Hello Reader, I know this is not the proper newsgroup for a question like this but it’s related. A friend of mine wants to trap me in a kind of a network marketing construction. It’s about selling consumergoods to people you know and you can earn (if you believe the story) a lot of money. I’m often warned for constructions like this but I’m having a problem with finding proper arguments which are simple to explain to my friend because he doesn’t believe me right now when I warn him. I know it’s all nonsense but can please somebody help me with the right arguments. [Mod: Pretty simple. You have no motivation for it. End of discussion.] Much thanks, Richard de Fijter please reply also to: because my newssoftware isn’t working too well. [Mod: Do yourself a BIG favor and drop worldonline.nl and get an account with demon.nl I had nothing but problems with worldonline.nl]