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Network Marketing-Valuable Lessons from Costly Mistakes, Part 2

Updated on October 20, 2017

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 remaining supervisors quit. The other, actually my very first, 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 new system concentrated on attracting consumers, getting them great results and maybe turning them into distributors.

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.

Many distributors had quit and our "line" was considerably shorter by this time. My sponsor, one 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 products is not enough. Do other people need it? Can you sell your products to others? Can you build a consumer group that will continue to need the product?
  • 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". There is nothing wrong with having big dreams but you do need to know how to finance them and have realistic expectations while doing so. Monitor your progress 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. Inquire how the business is working for him or her. Do some research!! If you do decide to join and invest your money make sure you have tried and believe in the product and can create an income selling it to others. You must 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 and living 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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