I received a phone call yesterday from another distributor in my network marketing company. She was approached by a former distributor who left our company and joined another and she’s thinking about going. Before she did though, she wanted to know what I thought.
She says that she believes very strongly in the products that she currently sells but she isn’t making enough money. She was told that she can build a business in the new company and also keep selling the products from her current company as a hobby.
She asked me about six months ago if I would help her take her business online so that she could make money without being constrained to her local area. So she wanted to know if I would still be willing to help her build her website if she was building this other company as well.
Here’s what I told her.
Which Company’s Product is Better?
When you are looking at network marketing companies you have to consider the product first. Is the product something that you will use yourself? Is it something that you can get excited about?
I’ve written many times before about how you have to use your product yourself. You have to get experience with it so that you can talk openly and honestly with your customers about it so that they will have confidence in buying it from you.
My friend says that she likes the product from both companies, so the decision is a wash based on this consideration.
How Much Money Can You Make?
Money isn’t everything, but this is a business and you need to generate an income to support yourself and your family. You definitely have to take into account how much money you can make with each company.
Network marketing companies like to make their compensation plans confusing and add in different kinds of bonuses and overrides to make it look like you have 36 different ways to earn. And when you go to the company’s annual convention it will be just like The Price is Right because you’re going to leave with… A NEW CAR!!!
I ignore all that. For one, I must be the only person on the planet who doesn’t get excited about cars. BMW, Mercedes, whatever. I really couldn’t care less.
The only thing that I look at in the compensation plan is how much do I keep in retail profit when I sell the product to a customer.
There is only one way that a company can bring in money – the sale of their product. All those other 35 ways you can earn, and that car, all come out of the money the company takes in when their distributors sell their product.
The retail profit is the only piece that you get to keep for your own effort.
With her current company, the one I am with, we keep 20% in retail profit when we sell the product to customers. The other company that my friend is looking at says that you can earn up to 20% in retail profit. My brain translates that as saying that you can earn less than 20% in retail profit. That’s not good. They must need that money to pay for the car they are giving to someone else.
What is the Price Range of the Product?
20% in retail profit is nice, but 20% of what? If the item only costs $5 then I have to sell a lot to make much money. On the other hand, if it costs $10,000 then I only need to sell a few every month.
In our current company our products range from $10 for a water filter replacement part to $1399 for a king magnetic mattress pad. My retail profit can range from $2 for the replacement part to $279.80 for the pad. There is a commission percentage too, so I really like it when someone orders a mattress topper.
The other company has packs of product targeted to distributors that cost up to about $450. Individual products look like they are all under $100. There doesn’t appear to be a whole lot of range, so you’re going to have to sell a lot of product to make money.
Splitting Your Energy Between 2 Companies
As I said at the beginning of this post, my friend was told that she could sell the products from both companies. If she already had a solid business established with one of them then I would agree that she could get the other one going as well, but she doesn’t.
She wants me to help her build her current one online so that it can be a hobby while she builds the other one. To me, that’s essentially building two businesses from the ground up.
Here’s an analogy for you. You have 2 vacant lots and you want to build a house on each one. Are you going to move in faster by dividing your effort between the two projects or by focusing on just one of them first?
You might get cold this winter if you spread your efforts too thin.
Will I Still Work With Her?
I have 2 goals that I’m working toward when I help people build their network marketing business online. The first is to build my own team of distributors who want to build their business online through retail sales like I am. Obviously these people will all be in the same company as I am.
My second goal is to build a tribe of people in network marketing who are actively blogging and promoting each other’s content on each other’s blogs, Facebook, Twitter, etc. It doesn’t matter what network marketing or affiliate marketing company you promote. Some diversity will actually be a good thing.
So of course I will still help her because, if she plays, she will still contribute toward my second goal of building a tribe. The real question is if she will play or not.
The people that will be working with her to build the other business will have her doing the same things that haven’t been working for her for the past several years in her current business, either because they don’t work or she hasn’t been doing them.
The Bottom Line
To make money in any business you have to sell product to customers. Ideally you want to have existing customers coming back to buy on a regular basis, probably with some kind of monthly consumable product. You also want to have a steady stream of new customers coming in to keep your business growing.
To do that, you need to be meeting new people all the time, either in the “real” offline world through advertising and going to networking events or whatever, or in the online world through a website, blog and social media.
My friend’s complaint right now is that she isn’t getting any new customers in her current business, which is what got her looking to me and the internet. Will switching network marketing companies change her situation?
Your neighbor’s grass looks greener than yours, but will moving into a new house change that? Probably not. Your neighbor spends from sunup to sundown taking care of their grass to keep it green and healthy. If you want your grass to be green too, you have take action on it and stick with it.
What are your thoughts? Does jumping from one company to another really change anything? That is assuming that both companies are healthy and have quality products.
I’d love to hear your thoughts in a comment below and please share this post with your followers on social media.