The statistics about network marketing are abysmal: up to 97% of people who start such a home-based business drop out of it within the first three months. But don't let this scare you away from growing your own residual income check! The reason for the high drop-out rate is that most newbies in the field make major mistakes.
Following are the top seven mistakes to avoid in a network marketing business.
1. Bothering friends and family.
A great many people who give up on their business give up because they are told to approach every single person they know with the business opportunity. While this strategy works for a small percentage of those who join the industry, for most it leads to wasted time, strained relationships, and sometimes even lost friendships.
2. Expecting overnight riches.
This is another huge reason for the big turnover rate in the MLM industry. While it is true that on rare occasions a beginning network marketer has a five-figure-per-month check six months into the deal, for most people it takes longer than that just to grow their check to a few hundred dollars per month.
3. Not caring about the products or services.
One of the main reasons people leave any company within the first few months of joining is not just because they're not making any money, but because they are in addition spending money on products or services they would otherwise never use. Only join a company because its products or services fit you, or even better, excite you.
4. Joining a very young company.
The vast majority of new business shut down within the first tow years, including network marketing companies. While age isn't a guarantee of stability - lawsuits and bankruptcies happen - your safest bet is to join a company that is at least three years old and growing.
5. Buying leads and/or cold calling.
If you've ever seen an ad promising you hundreds of targeted leads for a price, you've seen one of the biggest scams directed toward new network marketers. E-mailing or calling people who have no idea who you are is the worst business-building strategy there is.
6. Hoping for "spill".
Many MLM companies structure their compensation plan so that if someone above you sponsors a new distributor, and they "spill" into your group underneath you, you will get a commission on their purchases. Some people sign up with a particular network marketing company just because they think they will earn money without working because of all the people that will spill under them. Spill rarely happens, and no one ever quit their job because of it.
7. Not learning the skills necessary for success.
You have to sell at some level in order to earn real money in the industry. You have to learn to be persuasive without being obnoxious or pushy, and to communicate with people so they see the real benefit of buying your products or joining your team. None of these skills is rocket science, but if you ignore them, you'll quickly become a statistic.
Network marketing is a great way to grow a second stream of income. Avoiding these mistakes is the first step toward success, so treat each one like the Black Plague.
