The 10 Questions you should ask before joining a network marketing company
Is it just me, or does it seem like every day someone else you know is joining a network marketing (MLM, direct sales, social selling) company? It can certainly be a savvy financial move as it allows anyone the opportunity, with relatively little investment and/or qualifications, to build their own residual income.
But not all companies are created equal. How do you choose who to jump on board with?!
If you’re open to making some additional money (and having fun in the process), or even replacing the income from your current job + working from home like I have, then partnering with a company/team in alignment with your values & lifestyle is definitely an option to consider – especially with the way commerce is moving quickly toward the internet, Influencer marketing, and social selling!
When you’re looking at opportunities, it’s important that you don’t get distracted by hype (we’re the “best”, “ground floor!”, “founder’s shares!!”, everyone is doing it – see #6 below for why that can be a no-go!), do your research, and know the 10 questions you should ask before joining a network marketing company!
Everyone always says their company is the “best”…
So, how the heck do you know which to join and which to run from?
The answer to, “which network marketing company should I join?” isn’t one I can give a definitive answer to because a large part of that is going to be what works for and appeals to YOU, your lifestyle and values as far as products, business model, and leadership (your chosen upline or sponsor!).
To help you avoid getting into something you later realize isn’t all it was pitched/made out to be, I want to share some of the lessons I’ve learned along my journey in the industry in the form of the questions I now strongly recommend any of my friends/followers ask before joining any network marketing company (or making the decision to partner with a new one, like I did!).
I hope you find these 10 questions a super helpful framework in your decision making if and when you get serious about adding that additional income stream!!
10 questions to ask before joining a network marketing company!
- Is the company product focussed? This should be a “yes” answer. Sketchy companies are selling an opportunity to sell an opportunity, and that’s a BAD sign! That’s where network marketing companies get the “pyramid scheme” reputation (those are actually illegal, and those are the companies that can and do get shut down!!). Another red flag is a super pricey and required Starter Kit. Personally, I would ask what percent of the company revenue comes from customer SALES versus the purchases/sign up kits of distributors or customers who are considered “distributors”.
- Do you have to build a team if you don’t want to? This should be a “no” answer. Remember, you want to look for a product-focused company unless you want to recruit the masses and assume that everyone else wants to + is skilled at that, which I can tell you that 98% of people are NOT.
- Do you have to build a team to make good money? You really want to find out if the only people making money, receiving recognition, and rank advancing are those who recruit and build teams. If you were to build a team with the company, would the majority of your team’s volume (AKA your paycheck!!) be coming through customer sales (that’s good!!) or through new distributors sign ups? Remember, most people are NOT going to be recruiters. If you’re looking at a company where everyone is flocking to sign up or has in the recent past, and people at the top have made their money that way, you want to make sure that there will be actual customer sales to replace those starter kits padding your paycheck after the momentum burst is over.
- Can you “outrank” your sponsor? This should be a “yes” answer. You do NOT want to partner with a “top heavy” compensation plan where all of your efforts would benefit your upline, and you wouldn’t see equitable compensation for the work YOU do.
- How old is the company? You will want to join a company that has been around and thriving for a while so they’re 1) not constantly working out “kinks”, 2) have a tried & true product and process, and 3) you’ll actually be able to collect residual income down the road versus looking elsewhere if and when the company folds (95% of network marketing companies do NOT make it long term). “Ground floor” can sound sexy, but “Stability” sounds even sexier, IMO ; ) The IDEAL time to join a company is pre-momentum (the period in a network marketing company when the most millionaires are made, lasting anywhere from 2-7 years!).
- How saturated is the market? You do not want to get in with a company everyone has already heard about. If you know a bunch of people who partner with that company, then likely so does everyone else that you’ll be speaking with – making the competition a lot more stiff; The likelihood that your potential customers and business partners have already bought from or joined in with someone else a lot higher. It IS possible to build a successful business in a saturated, but it will be an uphill battle and you’d better have an existing large network. Trust me on this one : )
- Is the product or product line unique? Can someone just go and get the product/s (or something super similar) just anywhere? How well do the products sell? You’ll want to find this out for obvious reasons – you want to be with a company that has a product that’s in high demand ALWAYS – not a fad. This is essential for customer retention and referrals (see #10!).
- Is the product consumable? Meaning, will people want/need to buy the product fairly often? For example with Tupperware, that’s not a consumable product so you have to think, how many plastic bowls can 1 person actually buy?? Does the company have “anyways” items, in addition to “hero”/unique products that can’t be purchased anywhere or through anyone else, that customers could repurpose their spending from Amazon/Target/Walmart/etc to YOU, for life? THAT is where the real residual income comes into play from the sales side of your business…
- Consider the way the company & team teach marketing. What marketing strategies do they teach, use and expect? Are they teaching you to build a brand around yourself (opening doors!), or are you expected to become a billboard for a product/product line? Will you be compromising your personal brand or limiting future endeavors by partnering with this company based on the way they teach/expect you to market for them? Are you comfortable marketing the way you see people in the company doing so for the long term (e.g. if home parties aren’t your jam, don’t join a company that encourages building that way)? Who is your sponsor/upline, and are they a leader and/or mentored by a true leader In the industry (AKA do they know what they are doing, and can they teach others to do the same?)?
- How is the culture of the team & company? This is really about 10 questions rolled into one because it’s THAT important. Are these people you’d like to sit down and have a cup of coffee or a glass of wine with? Is it something you’d want to be a part of long term? These are people you’d be around at events, chatting with regularly, etc. Are they having FUN or is it ALL about business?? What does the company believe in? Does it align with your own purpose and passion?
- Ok, I have to make it 11… What systems are in place to incentivize referrals and make them easier to acquire? Referrals are true residual income. A referral is business/sales that YOU do not have to actively work to acquire. One of the biggest draws to the company I partner with was their referral system (half of my customer volume is from people I’ve never met, and I only post 1-2 times per month about product – without using the company/product name – and have $4-7 in personal sales each month).
- BONUS questions to consider regarding time: How much time approximately would you need to spend working your business each day for the financial goals you have with this company? Will you need to be spending tons of time on the phone for 3-way calls, explaining products, etc.? Will you need to do trade shows, vendor events, or home parties to grow your business? These things can add up to a TON of your time. And if you have very little time to devote to building a side business/income, or you value TIME FREEDOM like I do, you are going to want to look for highly efficient, duplicatable systems to get the job done in the pockets of your time! No amount of $$ is worth having NO time!
In conclusion, don’t get caught up in the hype around the next “best” company. Do your homework and due diligence by asking these questions in light of your goals and what you want your lifestyle to look like in 5/10/15 years, and you too will find a company that you’ll be stoked to be a part of and an additional stream of income that can be a turnkey to so many of your other goals!
As with anything in life, your success in a good company is going to depend on the work ethic you have and the actions YOU take to build a business, but it’s super important to consider the products, business/revenue model, compensation plan, marketing systems and whether or not you can work with all of that, before joining a network marketing company!
I hope you find these questions helpful in your search for your own “home” company/team, and set you up for massive success and FUN!!
In asking these questions, I was able confidently commit to a company that I consider the #jackpot when it comes to partnerships for myself + those I’ve brought on board!! If you would like to chat with me to see if my leadership, company, & systems are a fit for you, email me at ashley@taylor-mademama.com, or enter your email below and I’ll be in touch:
