Network Marketing-Valuable Lessons from Costly Mistakes, Part 2

When I started this business I had never even heard of Network Marketing or MLM. The compensation plan fascinated me. So many people were creating personal wealth and enjoying a life style I wanted so badly for me and my children.

They say "having money can't solve all your problems" but considering I have a pretty good life I knew accumulating wealth could eliminate about 90% of mine. All I had to do was invest some money, listen carefully to my sponsor and follow the plan set before me. By teaching others to do exactly as I did I could have a six-figure income within 2 years working from home and being my own boss! Just think of all the people I could help attain financial freedom. The sky was the limit and I could barely contain my excitement!






The "Income" Stories Were Exciting!

It never occurred to me to ask my sponsor or hers about their income. In general that is a rude question but in this business people were always talking about the size of their checks. During the Opportunity Meetings they would show copies of them on the big screen along with pictures of their beautiful homes and expensive cars. Proof that financial freedom is not only possible but they had attained it! Those stories were good enough for me so I never pursued the question of financial success with those that were teaching me.

Loving The Products and Becoming My Best Customer

I used the products, believed in them and got results I could enthusiastically talk about but I couldn't make a profit from my sales because I was investing much more money than I was taking in. Besides, I was my best customer!

I wasn't a good salesperson and, in retrospect, I should have been advised to quit or improve my sales skills and continue building my consumer group before recruiting. Red Flags were springing up. My mentors didn't notice them. Afterall, my 3rd upline had had some measure of success and recruiting had a lot to do with that. The rest of us were following by example and excited to do so.

Recruiting Was Easier Than Sales

So, I started recruiting. That was fun and I was actually pretty good at it. I was on the fast track so I picked three forms of advertising. I distributed thousands of flyer cards and hundreds of other flyers monthly. This was extremely time consuming and somewhat uncomfortable but fairly inexpensive and I should have just stuck with that.

I also placed newspaper ads. I did lots of research on circulation and current "Work From Home" ads that were running in newspapers in different cities and towns. I had an ever growing binder filled with all the info I gathered and the success or failure of each campaign. Every three weeks I would start a new and very expensive campaign advertising to 1.2 million people.

Along the way I also bought "mailing lists" and internet advertising. My monthly "Budget and Balance" sheets always reflected a huge loss but my ad campaign was gaining momentum!

Successful Recruiting With Poor Retention

Within 10 months I recruited seven "supervisors"; three with flyer cards/flyers, two from newspaper ads and two from a mailing list.

  • One disappeared shortly after signing up.
  • Another experienced product "side effects", anxiety over putting out flyers and spending money (I certainly understood his anxiety) and quit within a couple of months.
  • Out of the remaining five who got great product results, one couldn't get through the "getting started" phase of business and two weren't comfortable with sales or flyer advertising and each had a spouse that wasn't quite on board with their new business expenditures so they quit within a short period of time.

  • Two of them followed in my footsteps. They tried to build a consumer group but their concentration was on the fast track advertising for recruits.
  • I had two active supervisors that I could help with their advertising campaign but, like me, they were each their own best customer and I was unable to help them have a profitable business.
  • Fifteen months in business, debt piling up, negligible royalty checks from the company, running out of credit and nowhere near an actual income, let alone six figures I decided to stop my costly advertising campaign.

My Business Was Built on a "House of Cards"
My Business Was Built on a "House of Cards" | Source

A House of Cards

Ironically, around that time the couple at the top of the line looked down-line and discovered our advertising practices greatly outweighed our consumer group building and product sales.

They put a halt to all recruiting with the current Lead Generation materials. Apparently my business was not the only one built like a house of cards. It seems most of their second line on down, a considerable number of people, were taught the same way and many of them had incurred much debt while that dream of financial freedom was still nowhere in sight.

One of my supervisors quit and the other, actually my very first (he had responded to a flyer card) stuck with me through the transition to a new and more straight forward system that was created for the remaining members of their group and other groups within the company.

This system concentrated on attracting consumers, getting them great results, maybe turning them into distributors, etc., and some started recruiting again as well.

After all the time, energy and money I had invested in the business I was not quite ready to quit. I guess I still held out some hope for success. Our "line" was considerably shorter.

My sponsor, another of her supervisors, I and my supervisor all hung in there for awhile. We tooled up, tried to improve our skills and work smarter this time

Soon hope gave way to frustration. The dream was not to be. Whereas those closest to me pursued other "business" opportunities I have been too scared and skeptical to try again.

In order to be successful at a business such as the one I tried I think one needs to know or at least recognize his or her limitations. After 5 years, lots of practice and studying my skill sets I was not a good salesperson. What's more, I was not going to become one. I bought every available tool, some costly, thinking that would improve my outcome. All the tools in the world don't make up for the lack of skills to use them.

Working From Home-A Few Tips From One Who Failed

  • Loving and using the product is not enough. Do other people need it? Can you sell it to others, build a consumer group and help them find others to do the same?
  • If you don't have unlimited funds you have to make a budget and stick to it. Don't keep spending money thinking you can pay yourself back when you "hit it big". Nothing wrong with having big dreams. Just know how to finance them and be realistic. Monitor your progress (or lack thereof) toward the goals you have set and change your course if need be.
  • It would help to take some business courses. Just because you have a "Monthly Budget and Balance Sheet" it doesn't mean you have a business plan. You have to understand the numbers at the end of the month and make adjustments if necessary.
  • Don't follow blindly along the path of your mentor or sponsor-to-be. Inquire how the business is working for him or her. Do some research!! If you do decide to join or invest make sure the business is really working for you and you understand all aspects of the business before you recruit others.
  • I'm sure my sponsor and our up-line did not intend for us to fail so miserably in so many ways. I certainly did not set out to hurt myself or others. People get caught up in the hype of getting rich quick, the dream of financial freedom.
  • One very valuable bit of advice I did follow and continue with to this day is personal growth and development. I invested in books and CDs that I have read and listened to over and over again. I was fortunate to see Les Brown, Zig Ziggler and especially Jim Rohn in person. Make sure you read "The Secret". The best investment you can make is in yourself.

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Comments 11 comments

Bud Gallant profile image

Bud Gallant 5 years ago from Hamilton, Ontario, Canada

Very interesting story. I can really understand this. I got involved with a work from home MLM in the health and wellness industry myself that ended up costing me much more money than it ever made for me. It's certainly easy to get in over your head when you're buying into a lot of hype. I think it's a fair strategy to start off slow with these types of things and see if they're going to work for you before investing large amounts of time and money, but often the structure rewards the risk-takers. Of course the numbers demonstrate that 99% of people will not be successful in an MLM. There's a lot of explanations for that, but it's still a sobering statistic. I believe that with the right attitude and perseverance nearly any business can be profitable, but some are definitely better suited to one versus another. For myself, I'd be very reluctant getting involved in any type of sales or recruitment based venture like that again.


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

Sad but true. If I hadn't believed so strongly I'm sure I would have stopped throwing good money after bad, so to speak. One hates to quit when they're in so deep. The rah-rah meetings do get you excited to get out there and build your business. After all, the speakers have made it big and it seems so possible, even probable that you can live the same dream of financial freedom. They actually said one does not have to be a sales person to do the business. In retrospect I'm not sure how one can build such a business without those skills. At any rate, I too will not be getting involved with MLM again. I know my limitations now and that knowledge came at a high price. Thanks for the comment, Bud.


travel_man1971 profile image

travel_man1971 5 years ago from Bicol, Philippines

I had experienced what you did. Those rah-rah meetings occupied my time, spamming my thoughts over and over again in order to get 'rich' quickly. But to no avail. I quit and just continue hubbing on HubPages.

Although, this is only a passive income-generating site, I am still happy and satisfied because I am able to share my views, opinions and my thoughts on topics that interest me.


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

I hope you quit sooner than I did travel-man. Your story lets me know I am not alone in this negative experience. Thanks for sharing:) I like Hubpages, too. If I do happen to make some money it will be a good thing, and without wreckless investment. Thanks for following my story. I'm hoping it will help someone avoid the mistakes I made.


no mac salad 5 years ago

I just read this hub and it looks like it was posted some time ago. I'm sorry that your business didn't work out. You wrote "I have been too scared and skeptical to try again." Please don't be, keep trying other things and keep writing.


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

Hi no mac salad and thanks for the words of encouragement:) I am enjoying hubpages and plan to keep posting. I am leary of "investing" in a work at home venture quite simply because I cannot afford any more losses and I truly am not good at sales. I do remember the mantra "never quit" and I plugged away for about 7 years. Had I been working smart perhaps it would have worked out differently. Are you currently growing your own business?


5 years ago

Voted up. You make a good point about advertising. It's possible to do too much, or too little. Striking a balance, really, proportionate to the desired/realistically expected level of business. One or two of my comments on your other marketing page might have been off-focus, but I wanted to say that at the whole advertising/selling one's services side of thing can be hard sometimes to get the balance right.


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

Advertising was tricky. Expensive methods are easier but not very cost effective when just starting out. I seemed to attract just as many people with the less expensive but more time consuming methods and should have stuck to that!


5 years ago

Yes, you're right; it can be tricky sometimes. There's nothing like learning by experience, mind you.


johnnyhoz profile image

johnnyhoz 4 years ago

I agree with some of the comments here but would it be OK if I shared this with you, this is my story:

I now have a great residual income from my online Network Marketing business, but it wasn't always that way, I was very frustrated and struggled for over twenty years hopping from one opportunity to another, then I got myself educated.

Thousands of people in network marketing get frustrated and ask themselves certain questions, maybe some are familiar to you:

I worked so hard and still can't do it.....What's wrong with me?

What's wrong with the company? What's wrong with the product?

I followed my upline mentors instructions:

I went it meetings.....I did three-way phone calls……made a list of my friends and family

Read all the books, etc. etc. blah blah blah

Idiot!, why did I ever think that I could just jump into this profession with no skills and be an instant success, earn the same as all the others walking across stage with their fat checks, I struggled year after year.

One day I stumbled upon a mastermind group who were offering free skills training, I was very sceptical, there's nothing in this world for free what’s the catch? I spoke to a senior mentor and coach who explained that they are a volunteer organisation from various mlm companies and assured me they would never ask me for a penny for any of the skills training, and they were true to their word.

All the skills training was indeed free, they believe in the value of education and self development and want to pay it forward and give back to this great profession.

WOW, I got training from some industry top earners, one that is known world wide who is still building his business today built over 100,000 distributors in one business and over 300,000 in another, can you imagine what his residual income is? I know what he was called many years ago "The dollar a minute man" he is known the world over for giving generic training, sometimes for free.

Did you know that most of the richest men in the world are part of a mastermind team;

EVERY Olympic athlete has a coach. The top ones hire their own personal coach,

A coach keeps you accountable and focused. There are just soooooo many opportunities in life to get sidetracked.

Pro athletes like Tiger Woods, Bobby Bonds, Peyton Manning, all the big stars, have several coaches. Each coach teaches their own specialty.

How To Choose A Coach?

I've been married almost 42 years. If I wanted marriage counselling, would I talk to someone who's never been married?

How about someone who's graduated from college with 3 or 4 degrees and never been married? Would I go to someone who's been married for 2 years or 5 years, when I've been married for 42 years? Would I go to someone married 10 years, with no children?

Or would I talk to someone who's been married 30 or 40 years or more and who has raised a couple healthy, happy kids?

Who would you want to get your coaching from? Somebody who has experienced it, or somebody who hasn't?

Our volunteer Network Marketing Coaches between them have decades of experience and will Mentor and coach you for free, they will help you select the right ethical online Network Marketing company to suit you, or help you accelerate your existing MLM business.

Why waste years of our most precious asset "TIME" Get your self educated.

Join me in "Mentoring For Free"

Tom Big Al has this to say "You can stumble through years of MLM trial-and-error or you can read this book first." So what's it going to be for you?

Just download the free generic ebook at the link below.

John

Mentor with a Servants Heart!

http://tinyurl.com/skillsRUS


pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Johnny, Thanks so much for leaving such a detailed comment. Congratulations on being persistent and finally becoming successful! I think it was my fear and lack of funds that kept me from pursuing another work from home/MLM/Network Marketing opportunity.It seems that every one of them is about sales and I don't believe that is my forte. I was just too skeptical in general. I do believe in mentoring and personal growth and development so I will download the e-book and let you know what I think.

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