Before any network marketer chooses to join any direct sales company to market their product or service, he or she should carry out an audit of the organization he proposes to represent. Successful companies have certain attributes without which they are doomed to failure. One should know what these attributes are.

There are four such attributes that any direct sales company must have for success. These are a) Leadership, b) Adequate Working Capital, c) A product or service that people need and d) A marketing program that can bring success to network marketers and attract customers. We can look at each attribute in turn.

Leadership

As with all organizations, those that are without visionary leadership will soon perish. Prospective marketers should especially investigate who are the organization’s leaders, their background and most definitively their previous involvements in other direct sales organizations. A closer look at the company’s website should reveal the organization’s global reach, its recent audited financial statements, its information dissemination systems, and its compensation and bonus policies. Remember you are going to invest in this company much like you would a company on the stock market so that all information on the organization should be carefully studied and professional advice sought (if need be) before you allow yourself to be recruited.

Adequate Working Capital

Can the sales of the company pay and sustain attractive commissions? Many companies require high up front registration and start up fees in order to augment working capital. Some company also have a breakage policy that only allows commissions up to a certain number of your down-line. Many companies find themselves with cash flow problems which can make them dishonor their commission commitments. When this happens they may suddenly go out of business leaving the hapless network marketer. One has to make a judgment as to whether a company can generate adequate sales so that cash flow does not become an issue.

The Product or Service

Is the product or service unique? Can the product or service be easily duplicated? Is the product or service inexpensive enough to have a great repeat purchase value? Does the product or service have real perceived value to the consumer? These are the questions that one may ask before one is recruited.

Many companies promote products or services that do not have these attributes. They in fact find themselves in highly competitive markets, not having established a niche for themselves. When this happens profit margins are thin and the ability to pay attractive commissions and bonuses are limited. These factors should all be examined carefully.

The Marketing Program.

Only five percent of network marketers are successful. Ninety five percent of them usually fail at this business because their approach to marketing the product or service is inappropriate. The traditional methods of developing ‘warm’ and ‘cold’ markets have been a great failure for the majority but this approach is still persisted with. This is an area where many companies have not done enough research on. The majority of marketers follow blindly the warm and cold market approach often loosing much money in the process.

There is a new and very promising approach that is gaining currency within recent times. This approach is the attraction marketing or education marketing approach which seeks to educate and attract the interested customers about the product or service rather than trying to ‘force sell’ him into buying. The internet is an excellent facilitator in this approach.

Nigel Gittens has an MBA in marketing and has been a network marketer for the past ten years. His website is http://www.mangosteenpowerteam.net .