The Disadvantages of Network Marketing

In the beginning I would like to explain to you the definition of network marketing.
Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella.

Network marketing programs feature a low upfront investment — usually only a few hundred dollars for the purchase of a product sample kit — and the opportunity to sell a product line directly to friend, family and other personal contacts. Most network marketing programs also ask participants to recruit other sales representatives. The recruits constitute a rep’s “down-line,” and their sales generate income for those above them in the program.

Things can get sticky when a network marketing network compensates participants primarily for recruiting others rather than for selling the company’s products or services. A network marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.

Since network marketing programs are usually exempt from business opportunity
regulation and aren’t defined as franchises under state and federal franchise laws, you’ll need to do your own investigation before investing any money.

It is also known as Multi Level Marketing “MLM”

But what are the disadvantages of Network Marketing?!

The biggest problem with network marketing is negativity once a member is negative about his job ultimately he could never jump beyond the first level and get tucked there left with no option than to wind up all things. This mainly occurs during the probation period that is during the first three months.

The most important thing in network marketing is interact with new people and communicate with them which require some good communication and interpersonal skills and not everyone is blessed with these skills.
“Sky is the Limit”, some believes some don’t but this actually happens in network marketing. There comes a saturation point beyond which your business growth gets steady.

As network marketing requires interaction with people, social networking is the best way to communicate with the masses and build up good networks. So you need a good social network to build your down chain where most people starts with a high positive energy and soon gets vanished.
There are several products which are promoted through network marketing, some attracts the customers and some fail to do so.

The core of multi-level marketing is creating a long down chain. Close to 90% of the people fail to go beyond the first level and wound up their business in first three months.
“MLM” requires great inter personal and communication skills and not everyone is blessed with one which leads to business failure.
This form of marketing has a saturation point beyond which the rate of business growth is marginal. It is impossible for everyone to get a lion’s share of profit.

Niche products and services are usually promoted through multi-level marketing which fails to attract buyers often.
In multi-level marketing you need to have a wide social network to create a down chain. Most people start with huge enthusiasm but the list of rejection.

And majority of companies and schemes are fraud and it is very difficult to trust on such schemes and companies which in turn make the task of genuine companies also difficult as individuals treat every company as fraud and therefore they will not market the products of the companies easily to their networks.

Another disadvantage of it is that individuals who do network marketing are amateur and not professionals and that results in even good products being marketed badly resulting in overall bad impression about the company and in case of marketing 1 dissatisfied customer will lead to company losing 10 customers and hence in a way network marketing can create more bad image than good image due to lack of experience and expertise of individuals doing network marketing.

People believe what they see and since in the case of network marketing there is no use of marketing channels like television, newspapers and internet people are uncomfortable with products which are sold through network marketing as they have never seen the products before. Hence in simple words, lack of awareness about the products make this type of marketing a tough job for the companies doing this marketing.

Nowadays, many people feel very interested in network marketing. Its huge and free
structure offers several possibilities to many persons. In fact, being an agent at a network marketing company means that you have no desk to sit on and no time limit to respect. It also means that your income won’t only be related to the products you sell, but also to the people you recruit.

The great number of advantages provided by network marketing has attracted people from all over the world. Moreover, it is no new discipline for people to talk about network marketing in every place. You can be sitting at a metro station besides a young woman that will start an ordinary conversation about a product and you will be amazed by how the discussion will flow until you are totally convinced to join a whole community.

Let’s be realistic: Who would not like to sell products at home or at a friend’s house among people he or she feels comfortable with, at any time the person likes? Moreover, who would not like to receive commission for persons he has convinced anywhere to join a community?
Actually, I have to admit that no person would… Unless he is aware of the disadvantages of network marketing!

In fact, besides its well sounding advantages, network marketing has several disadvantages that the lady in the metro station would not tell you about! The main principle of network marketing could be easily translated into a disadvantage if it is not well-managed. People who are keen on recruits are usually trying to interact with their first circle of entourage. The negative consequence of this act would be the weight of the failure of your friends in case they adhere. All the blame might be put on you, and you might sound like a liar to them, since they haven’t achieved as much as you and others did.

Moreover, talking about failure reminds of the fact that network marketing is no safe career. In fact, people who are asking you to join their community never emphasize enough the amount of money you are called to pay at the beginning of your career. In general, people do their best to buy their first products hoping that they will successfully sell them all. In case it does not happen, the amount of money would be a serious loss, and your failure to launch at the world of network marketing would be a deep deception.

As one can see from the above that network marketing has advantages as well as disadvantages and any individual thinking of doing it should first check the authenticity of company as there is no easy way of earning money and those network marketing which promises to get rich quickly are scam, hence one should be careful while doing this type of marketing.

In the end I would like to give you a Advice

While few people get wealthy in network marketing, others succeed with 6-figure incomes. As you learned in reading the good and bad about MLM, if you are willing to take the necessary action, you can succeed.

MLM is an incredible way to own your business with the potential for residual income.
Regardless of what you hear from others, the earning potential in network marketing is still greater than that of a traditional job.
If you are considering starting a multi-level marketing business, do your research
Good luck for every one.

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