If you’ve ever been exposed to the concept of network marketing, then you’ve probably heard the stories about how you can build your network marketing downline once…and then walk away with an ever-increasing residual income. Sounds great, doesn’t it? I mean who doesn’t want to do work once and then continue to get paid for that work over and again?
It’s called residual income. That stuff that rock stars and Hollywood celebrities earn while sailing around the world in their yachts, while everyone else is punching a time clock. Well, something like that. The fact that residual income sounds so enticing, along with the fact that most don’t know of a way to create it, short of writing the next best-seller, makes the lure of earning residual income from a network marketing downline appealing to so many people.
Many people eagerly jump on board to promote the latest and greatest “ground floor opportunity”, despite the fact that the industry statistics show that more than 95% of those who get involved with a traditional MLM will not earn a substantial residual income…in fact, many will lose money. Whoa, whoa, whoa. I know you may be thinking to yourself, “I thought this guy was a fan of network marketing.”
Here’s the thing -I am an absolute fan of entrepreneurship and have been able to benefit greatly from building a network marketing business. However, the notion that someone is going to join a traditional MLM business, work for a couple of years and then retire on their huge residual fortune is, in my opinion, one of the “fairy tales” of this industry.
I’m not saying it’s never happened, or that it’s impossible, but I’m sure that most industry veterans that I ask would probably say that they haven’t seen it happen. I know I haven’t. Now, let me clarify one thing. I have known a few people personally, who have earned a 7-figure income in this industry. They may have earned enough money to retire and live off of money generated from their investments, but none of them are even still involved with the network marketing company that they were in when they earned their fortune.
Why is that? I mean, if they were able to create a 7-figure residual income, then why would they EVER leave? There are many different versions of a similar story, but the bottom line is this…the traditional MLM business model is fundamentally flawed. In a traditional MLM company, the main “customers” that purchase a company’s products are their distributors.
That’s not really something that a lot of industry insiders want to admit, but in my experience it is the truth. If a company had a huge organization of true customers who purchased a product because they loved it, not because there was an opportunity attached to it, then it would be far more likely that someone could build a sustainable 7-figure income. This business model does exist, and I’ll share some information about it in a second, but first let’s go over the truth about customers in a typical network marketing downline.
Let’s suppose that you are a new distributor in a tradition MLM company, and you want to be successful. When you ask your upline what you should do in order to succeed like they have, you are likely to be told some variation of the following:
1. Write down a list of 100 names from the various groups of people you know.(Very helpful to your upline, but I can virtually guarantee that this is NOT how they built their downline.)
2. Talk to anyone who comes near you the next time you are in public. AKA: the “3-foot rule”
3. Buy leads and cold-call them.
4. Tell your friends and family members that you have something important to “show” them. Don’t give them any specifics though, because then they won’t show up. (No wonder the failure rate is 95%+. Who wants to do that?)
Fast forward two years. You are one of the rare people who sticks it out long enough to make the tactics above work. (Yes, they can work…but the fact is they don’t for most people.) You now have a solid downline of about 4,000 distributors and you are making some residual income. Then it happens. You get a an e-mail informing you that your upline “guru” has left the company due to whatever reason. (Income dispute, launching a “ground floor opportunity”, better offer from another company, etc.)
You cross your fingers hoping that you can hang on to your team and your residual income, but by this time the writing is on the wall. After checking your back office, you realize that 70% of your team has jumped ship to follow your upline leader. You can say goodbye to your residual income. What about all of your customers? Well, unfortunately for most traditional MLM companies the majority of “customers” are actually the distributors, which is why the business model is fundamentally flawed.
If you’re thinking that there has to be a better way, then you’re in luck because there is a solution to this problem. It’s called the co-operative marketing business model. With this business model, you build up a customer base that purchases the company’s products because they love them, not because there is an opportunity attached to them. Because of the structure of this model, you could lose ALL of your distributors and could still maintain your residual income from the “real customers” in your organization.
To find out what you can do to make sure that you never have to worry about losing your network marketing downline again, go here: www.LeadWhisperer.com
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