With the current economic situation, millions of professionals and stay-at-home moms & dads are researching a network marketing opportunity. Because the industry of recession scares people into making emotional, poorly planned decisions, it is highly important to take your home based business like the real world business it is; consider what your initial investment will be, how much effort (number of sales, amount of members in your organization) it will take to recover your investment and reach profit, and more importantly, how familiar with the industry are you in order to attract associates.
When researching for your network marketing startup, there are basically two options for an initial investment:
– Multi-Level-Marketing (MLM) – The stigmatized concept of sponsoring members that sponsor members, marketing low-grade products in order to make passive income from those members “underneath” your organization has been modernized, and some companies are marketing great products & offering good compensation. An average MLM startup ranges from $100 to $500, plus your initial product purchase. You’re required to keep inventory, cover shipping and handling, and cover any liability.
– Top Tier Direct Sales – A network marketing company that utilizes direct sales will cover shipping and handling, and won’t depend on multi-level organizations. Each representative runs his/hers own business, under any name, handles payment, and then pays the company for the product at wholesale price. Companies that use this approach have their focus on marketing premium products, and initial investment ranges from $1500 to $15000.
The effort necessary during your startup also differs according to each model. In a regular MLM, since the products are inexpensive, commissions range from $5 to $50, which means MLM is a VOLUME game. Because the sales’ commissions are small, the focus is on developing a huge organization, and accumulate commission on their sales. Average profitable “downlines” (number of people in an organization) have at least 50-70 members and generate $2000 to $3000 in profits.
In an Top Tier company, under the direct sales approach, even though a startup in network marketing will cost considerably more, commissions start at $1000. And because commissions are much larger, network marketers the use Direct Sales focus on the QUALITY. Now, the commissions from initial sales are great, but what about passive income?
That is why most network marketers starting up are choosing top tier direct sales companies – even though initial sales give you immediate income, members are also growing a downline (much smaller than MLM), and that organization will generate passive income on even HIGHER sales. For example, in LifePath Unlimited, the second tier product pays a commission of $5000, and the third tier pays $9000!
When deciding on which network marketing to startup with, consider raising a bit more capital and joining a top tier direct sales company: profits will come faster, income potential is huge, and your effort is more rewarding.