Network Marketing-Valuable Lessons From Costly Mistakes- Part 1

Network Marketing

Network Marketing can be a profitable way to make money. I've seen it work for other people and honestly believed it was my answer to financial freedom. I jumped in with enthusiasm (and my money) and had high hopes for a bright future.

When I look back on my experience I can see the many costly mistakes I made. Although I am somewhat bitter that my sponsor and our upline did not help me manage "my business" better before I got in so deep I also realize the stars in my eyes and the dream in my head somehow blinded me to the reality that the model I was following could not possibly result in success. Now that I have assumed some responsibility for my dismal failure I'm hoping the valuable lessons I learned can help you along your path to financial freedom.



Source

How I Got Started

In 2002 I answered a "Work At Home" ad in the newspaper and received a free booklet in the mail. Intrigued, I ordered the 1st package for a small sum of money with a guarantee that I could return it for a full refund if I was not interested. The information boasted large sums of money in a short period of time and was loaded with many success stories. It all seemed too good to be true (and you know what "they" say about that) but if all these average people could do it, why couldn't I?

The 2nd package was free and contained some product samples as well as information on the levels in which I could join the now revealed wellness company. I had a lengthy four-way conversation with my would be sponsor and two others upline from her and decided to join at the "supervisor" level. I bought my "distributor package" and $4000 worth of product at a 50% discount. The reason I joined at the highest level was the possibility of a six-figure income within 18-24 months!

Investing In My Training

All I had to do was follow in my mentors' footsteps and execute the business plan exactly as they had done it. It was all very scary but so exciting. When the boxes of products arrived I was so overwhelmed I didn't open them for 3 days!! But, once opened and arranged on a shelf in my new office I really felt like I was in business.

Over the next few weeks we had many three-way "getting started" training calls. Once I would accomplish my tasks we would go onto the next step. Once all the steps were completed I had all the tools I needed to start advertising my business and selling the products.

These necessary tools were another investment in my business. Some of them would have to be replenished on a regular basis, others (like the "telephone support system" that included my very own "800" numbers, my merchant account and my website) would be paid on a monthly basis. My expenses were adding up but with a six-figure income looming in my not so distant future I could afford them.

During this "getting started" process and thereafter I was given much support and education by my mentors and other distributors. The top of my upline was a couple from humble beginnings that was very successful and had already formed their own huge "group" within the company. At least 5 recruits from their frontline, one of which I was 3 levels downline from, and all of whom had humble beginnings and no sales experience were also very successful and were helping people achieve their own success. The company had been in business for 20 years, was worth 2 billion dollars and had distributors in over 60 countries. I was very confident I made the right decision.

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Investing To Gain Momentum

In order to maintain my excitement and increase the momentum I was encouraged to attend the monthly "Opportunity Meetings" (rah-rah!) where they had product training, testimonials about product and income results and sales and recruiting training. The first meeting I attended had over 1500 people there! There is comfort in numbers.

The yearly major meeting was to be held in New Orleans two months after I joined. Because attendence at this major event is supposed to boost your business to the next level within 90 days I was encouraged to go and I knew I had to be there. It would be well worth the investment. I bought my event ticket, airfare and booked my hotel. I met my entire upline in person, attended all the trainings and the parties where you could "rub shoulders with" and "pick the brains of" the top distributors in sales and recruiting. I got autographs and pictures, took a plethora of notes and came away with the enthusiasm to put all that newly acquired knowledge into action.

It's been awhile since then but I do believe I hit the next level (as it turns out, the highest level I, my sponsor and hers, would ever achieve) in that 90 days or soon thereafter. The problem is I "invested" my way there.

Investing In Getting Product Results

From the very start I was encouraged to use the products and that made perfect sense."The bigger your tablet box the bigger your business!!" So, I introduced one product after another into my daily routine. I did love them and got wonderful results.

Getting good results and wearing "the button" (it wasn't very big but was so out of my comfort zone that it felt like a Satellite dish on my chest!!) are the easiest ways to attract people to you and talking to those people about the benefits of the products is the most cost effective way to build your consumer base. It sounds like a good, solid plan but my business did not profit.


While using the products was very beneficial, the degree to which I used them was a very costly investment for me. Even at a 50% discount, with all the products my kids and I were using, it was adding at least $500.00 to my monthly "business" expenditures.

Whereas the results I achieved did make it easier for me to talk to people about the products it did not make it easier for me to sell them to the people I talked to. I never did fancy myself to be a salesperson and even though I was told that would not make any difference once I used the products and got the desired results I still had a difficult time making the sales pitch. I lacked the necessary skills to be an effective and successful salesperson and it did make a difference.

Selling The Product-A Stumbling Block

Not to worry though...at least not yet. The couple at the top of my line created and built their business through retail sales and taught their first line of distributors to do the same. Whereas I consumed most of my inventory, they made their distributors sell their entire initial inventory before they could begin a recruiting campaign (I wish that had been expected of me).

My retail training manual had pull tabs I could create by hand and fliers I could order and different methods of distributing them. We had charts for measuring the success of this inexpensive product advertising campaign so we would know which methods worked best and how much advertising was needed to attract the number of consumers I wanted.


When I would contact someone who left their contact information on the "800" number line I had scripts to follow and a health questionaire that would help me suggest the products that would benefit them. I used the follow up schedule to support my customers and optimize product results.

Although It was easier for me to talk to people on the phone with all the info I needed at my fingertips I still had one big problem. I believed in the products but I thought they were somewhat expensive and shipping, handling and tax jacked the price even higher. I was totally out of my comfort zone when closing the sale. This lack of confidence caused me to offer discounts and incentives a new business can ill afford. At any rate, my customer base was never very large or stable.

Investing In Recruiting Before It's Time

I mentioned that the couple at the top of my line built their business through retail sales and taught their first line distributors to do the same. Well, that emphasis on building a consumer group first in order to support a recruiting campaign did not seem to trickle down.

The six-figure income I could achieve in 18-24 months would result from an aggressive Recruiting Campaign that would take place while I was attempting to build my consumer base. Whereas finding consumers and selling product was always part of the business plan, by the time I joined my mentors were placing the emphasis on recruiting right off the bat, so to speak, to build your business.

My consumer group was certainly not going to support a recruiting campaign but I was still learning and did not make that connection. I never claimed to be a financial whiz but I should have known better.


Source

Investing Further In Debt

I worked hard (though certainly not smart). I was doing as I was told in order to make my dream come true and following in my mentors' footsteps down a path to indebtedness I have yet to find my way completely out of.

Stay tuned for the most costly mistakes I made.

More by this Author


Comments 21 comments

pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Thanks for responding, Graham. It's good you were willing to give it another try. I can see how jewelry would compliment a hairdressing business.


old albion profile image

old albion 4 years ago from Lancashire. England.

Hi pedrn44. Ref your question. Yes I did try again, this time with jewellery. Again the same type of result, so I left it alone. We were in the hairdressing business anyway, both times I was just trying something to add on to our income.

Graham.


pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Thanks for the encouraging comment. It's nice to realize I am not alone:)I wish I was brave enough to find the opportunity that will work for me but the whole experience left me quite jaded. Did you ever try again?


old albion profile image

old albion 4 years ago from Lancashire. England.

Hi pedrn44. Like you I did a similar thing many years ago here in the UK. I was selling 'fragrances' in a similar manner. Fortunately for me I did not have enough money to throw at it. I soon realized I was on a loser and cut my losses. Millions of us have tried it, we are not alone. Just keep smiling. LOL.

Graham.


pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Hi jamila. Thanks so much for the encouraging comment and for sharing your story as well. You were very smart to pursue your degree. You have something to show for your indebtedness (not that paying it back will be pleasant or easy) I wish I had been smarter about my spending habits back then...but those dreams can blind you to reality. Thanks so much for stopping by and commenting.


jamila sahar profile image

jamila sahar 4 years ago

wow, what an unforgettable story, i can certainly relate to this, as i recently went back to graduate school and also have a ton of debt in student loans. i was not worried about this at the time as none of realized the economy would continue to get worse and worse. i just moved to a new area, and now have to build students, so i stumbled upon this site and began writing about what i love and i am passionate about. many thanks for all your kind words as well. music/piano performance has always been the anchor in my life, thank you for sharing this touching story, i am sure many people can relate to this, but you had the courage to write about your experience thereby helping many others !


pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Hi Judi and thanks for stopping by and commenting. As much as I'd love to work from home with a legitimate company and realize financial gain I know sales is not my strength. The ongoing expenditures can get out of hand when one is trying to make up for their lack of skill. I do hope my shared experience will make someone think before they leap!


pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Thanks Judi. Hopefully it will make people think before jumping into something before they know what it's all about and if it truly can work for them. As much as I'd love to work from home most of these "opportunities" are all about sales (which is not my strength) and the upfront money and continued expenditure can really get out of control!! I appreciate you stopping by:)


Judi Bee profile image

Judi Bee 4 years ago from UK

Well done for being brave and sharing your experiences with us. It is easy to get carried away with a new idea (which is what the people selling these schemes exploit) and your experience may well help a few people sit back and think things through before they dive in.


pedrn44 profile image

pedrn44 4 years ago from New Berlin Wisconsin Author

Yes, Seeker 7, those stars and dreams make all the hype sound so possible. It's true that common sense and any semblance of financial responsibility go right out the window with the possibility of financial freedom looming in the near future, Thanks so much for stopping by:) Sorry you also fell prey...we are not alone, by any stretch.


Seeker7 profile image

Seeker7 4 years ago from Fife, Scotland

Wow! This is some story and a familiar one unfortunately. I say this because I was stung a number of years ago and paid dearly for it. Like your good self - I had stars in my eyes that blocked out my commons sense and brains.

Voted up + awesome!


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

f, I'm wondering if you are currently blogging or have a website. If so I would like to visit it. You leave great comments and it seems you should be writing somewhere. It does not appear you are a member of Hubpages and I think you might enjoy it!


5 years ago

Yes, I like your use of the word thrifty; it's kind of in some ways back to the old Puritan/Victorian values; save, instead of the 'tax and spend' culture which has gotten ppl into a whole lot of trouble. Another thing is taking the time to search out vouchers in the free papers. Even if some of the stuff cut out won't be used in the end, yet if some of the vouchers ARE used, then it makes the effort of searching for them worthwhile. There are so many voucher schemes around, gift vouchers, etc. One example that you might appreciate: some parlors have gift vouchers and if someone makes it known that they would love some ink but don't want to fork out, then if it's birthday or Christmas time vouchers can sometimes end up coming your way as a gift. So there's lots of ways to over-budget unnecessarily, but there are of course also lots of ways to avoid spending, with a lot of analysis and effort. Okay I'll stop.


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

I agree, f. It is necessary to watch ones finances and become thrifty in the areas one can. I did not possess some of the necessary skills to grow my business in a responsible way. Dollar signs in my eyes and I really believed financial security was in my future in spite of the debt my monthly budget and balance sheets showed. It was a learning experience that I will not repeat. Thanks for your insightful comment:)


5 years ago

Voted up.

I try to do things with the computer and have earned a little by it. One of my personal tips that I try to work by is avoiding incurring expenses on computer enhancements, extra costs, etc. In order to get to the point where money started to come in I had to put in a very great deal of time; which if other work had been available, would not have been worthwhile, but in its absence it was really necessity which provided the impetus. Just my personal two cents'. (Part of the package also was to cut down on spending money on other things, too. Such as not eating in restaurants, which we used to do more. Also, unnecessary car trips, saving on the gas. For different people it would be different things, too. Like, I guess for some people it would be getting in the habit of wearing in alternation the jewelry that one already has rather than buying any new pieces, however inexpensive, maybe. Or joining a recycled computer printer cartridge scheme, rather than having to fork out in full every time. All sorts of ways, some of them hard, by which to save quarters and dimes, really. It all adds up, doesn't it. Drives one back to the enduring, spiritual values.)


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

Thanks arusho, I appreciate your comment and your well wishes...it is a slow process but I think it will work out in time:)


arusho profile image

arusho 5 years ago from University Place, Wa.

hope you can work your way out of debt. good hub!


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

Thanks, travel-man. A sad story it is. Wish it could have a successful venture.


travel_man1971 profile image

travel_man1971 5 years ago from Bicol, Philippines

I am following this story now, pedrn44.


pedrn44 profile image

pedrn44 5 years ago from New Berlin Wisconsin Author

Thank you so much for the advice. I will fix this hub and some of my earlier ones...before I learned about smaller text boxes and titles. Loved your pun:)I appreciate your support.


LuxmiH profile image

LuxmiH 5 years ago from Fort Pierce, Florida

Bravo for sharing your lessons! Like you, Iv'e done that, been there and got the products to show for it.

May I share one of my Hub lessons with you,for easier reading? In fact you can go back and do it on this and your other Hubs. The tip is this: break up your information into smaller blocks.

This is because on-line readers tend to read really fast and in order to entice the reader, smaller bite-size paragraphs, with or without a heading, will cause your writing to take off like a rocket.

Check out some of the well known Hubbers and see how they do it.

You have so much to offer, I'd like to see you at the top.

Bravo I believe that you are on the "write" track. ('Xcuse the pun)

Keep following your passion.

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