network marketingNetwork marketing should be effective—operative word being should. On the surface, it seems to be a really easy and efficient way of making money. You purchase a product, tell your friends about it, and earn commission based on your referrals. This is what most TV advertisers fear most: that word-of-mouth advertising renders their big money advertisements irrelevant and ineffective.

As you refer to your friends, you earn a few bucks. But the big money is actually supposed to come from just how many of your friends did the same thing you did—which is to sell and recruit more people. This is essentially how network marketing works. As your network grows, so does your profit. There are several reasons as to why 97% of firms go under and here’s why.

Network marketing pitfalls #1: Compensation

To be able to earn any income, you have to shift products down the line. Imagine if a product costs $1 per order. This translates to about 100 orders in your team for you to make $100. This becomes a real problem because you’re putting in so much work for a measly hundred bucks. And if you think about it, you would actually need about $500,000 to pay off your car loan, mortgages, credit card bills, and generally to allow you to live comfortably the way you imagined. Network marketing does seem easy money but if you look at the nitty- gritty, it certainly won’t live up to your expectations.

Network marketing pitfalls #2: Recruitment

This is where you can try to make up for the $100 we just mentioned. By recruiting more people to your team, you can have more people shifting products thereby increasing your income. Sure, you have a lot of friends, but those who are interested may run out or just aren’t that good at network marketing. To make it work, you would actually have to convince strangers to be a part of your team—and most people don’t like doing this. It’s hard work, demoralizing, and difficult.

The answer to network marketing

If I haven’t made myself clear, let me repeat. If you think making a fortune with only a dollar at a time is possible, think again. If you think you can do cold- calls to strangers and enticing them to join your team, think again.

Forget about traditional network marketing and see it from a tycoon’s viewpoint. Sell products that will sell for a lot more. Instead of sticking with a $1 product, why not opt for a product that sells for $500? And if you can’t handle talking with strangers, delegate! Network marketing will already give you the people to do the things you don’t want to do. Have them schmooze, sell, and close deals.

You can avoid the pitfalls and create it into something you can really live with and live off of. Even if you’re the biggest introvert in the world, network marketing can still work for you.

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