Recently I’ve noticed some direct sales companies discounting their start-up fees.  A basket/home decor has a $19 start-up, network marketing companies offering free pre-launch promotions, and others with similar dirt-cheap fees to join.

At these prices, it makes the skeptics question if you can even consider it a business. Is this good for the direct sales industry?

I don’t know the recruiting stats whether this is good or bad for these companies long-term but I do have my opinion on it .

The problem I have with these free, rock-bottom start-up fees, is that it attracts the throw-away mentality. You know, so what if it doesn’t work out because it didn’t cost anything to sign up with xyz company.

That said, the upside is that if someone loves the products, she/he can use the so-called consultant status to buy products at wholesale prices, which helps the sponsor’s sales.

A few months ago, I took advantage of Beachbody’s free sign-up to get a fitness video to save 25% without pursuing the business. The sale of my purchase certainly helped my friend’s sales volume for that period.

But the biggest concern I have is the saturation in one concentrated area. When your company offers free or sign-up fees for less than the price for lunch, you might get more sign-ups, but it comes at the expense of reducing sales activities from other direct sellers.

It’s a challenge when you have four consultants representing the same company at my daughter’s school.

You might think there’s plenty of business to go around and there is but most people tend to market to their “friends”. In this case, the circle of mommies, becomes quite small. You run the risk of alienating one friend over the other based on whom you buy from.

There’s also the risk of seeing your company’s products on Ebay, Amazon, and other sites when you have people using the wholesale discount and re-selling the products at retail.

To be fair, the number of sign-ups doesn’t mean they’re all active or building the business, far from it.  Plenty of people sign up purely for the product discount. And some sign up and do absolutely nothing.

I don’t know about you but I find value in exclusivity. I also value things more if I have to work hard to get it. Whether dishing out a few hundred to start a business or buying a piece of art that’s worth more than $10 bucks, there is value in scarcity.

Would you hold the same value for a business that costs $400, $500 or even a $1000 to start? Or one that you can easily enter for free, $10, $30?

I don’t know if the free or nearly free start-up fees is good or bad for the direct sales industry because there are clearly pros and cons to this.  But I’d love to get your take on it.

Your thoughts?

’til next time,

Janette Stoll

Just learned this week that Eiro Research – a once rising star in network marketing – is shutting down its network marketing business model. Eiro Research launched in 2009.

Statistically, it’s not that surprising considering most new start-ups fail in the first two years.

This article isn’t about Eiro Research specifically but what direct sales and network marketers can learn from the rise and fall of companies. It happens. 

In 2010, two companies I know of shut down its direct sales business model: eFusjon and Success University. 

If you’re a solo entrepreneur, I believe you should consider having more than one source of income, and always keep your options open. That also means thinking beyond your direct sales or network marketing opportunity.

Regardless of which company you represent and yes, even established companies, do go out of business. 

Another direct sales company Weekenders was in business for over two decades before going out of business a few years ago. It could happen to any company.

As I’ve said in my previous articles, the only thing you should bank on is investing in YOU. The person you should brand and promote vigorously is YOU.

This isn’t a knock on your company or a question of your loyalty by any means. But when you brand you such as having a main hub i.e. your blog or site, you’re marketing your own brand, which you control 100%.

You have zero control when it comes to the company you represent and truthfully, no one knows what goes on behind closed doors of these privately held companies.

Even one of the founders and top distributor was “surprised”. The lesson I got from Eiro Research shutting down re-affirms what I’ve believed for quite some time. That is … 

Work smarter, have multiple streams of income, be open-minded about new business ventures, explore your options, and always promote You, Inc. first, regardless of which company you represent.

What are your thoughts on Eiro Research shutting down?

’til next time,

Janette Stoll

P.S. Do you know what it means to brand you? Grab my free report and learn why you must in this competitive marketplace.

The truth about network marketing is the business model is simple but the business can be difficult to build from the ground up especially for a new distributor who isn’t told the truth on what it takes to succeed in network marketing.

Instead of telling your new recruit how easy network marketing is how about preparing your recruit on what it really takes to succeed?

The reality is starting any business can be a daunting undertaking. But in network marketing, the attrition stats are outright scary.

Knowing the attrition rate is over 97% or whatever it is, why would any rational person sign up right? It’s because we buy into what’s possible and the dream of being in the top 3%.

Heck, if so and so did it, why not me? That’s definitely the right thinking. But the problem is that most aren’t disciplined enough to develop the right entrepreneur mindset and learn the skills to succeed. Skills such as marketing, personal, and business development are mandatory as an entrepreneur.

Let’s consider some tips for preparing your new recruit:

Ownership

Encourage your new recruit to take 100% ownership and responsibility. Don’t get bogged down with babysitting your new recruit. Point them to the back office training and materials. The more invested your recruit is in her business, the more ownership she’ll feel towards her business.

In a new job, you’re expected to do the work and not doing the work, will get you fired. Showing up in your business is the first step.

Expectations

Set clear expectations in terms of what they can realistically earn based on their efforts. You really get what you put into your business. If your recruit wants to earn $5000 a month and puts in 10 hours a week, that’s not likely to happen.

Training

You don’t need to spend a lot of money but do set the tone from the beginning that some things aren’t free and investing in personal growth and business development training are crucial to one’s success.

Trainings such as setting up a blog requires web hosting and an autoresponder to start a subscriber list. Encourage your recruit to start a personal development library of books. The day you stop learning is the day you put a cap on your earning.

Practice

In tennis, top players train with relentless efforts everyday to prepare themselves for each match. The off court work sets the foundation for their on court games.

Likewise, in network marketing, you put in the daily work to maximize your income. You practice daily to earn the most from your commission checks.

Short term memory

In tennis, it’s about short term memory. Focus on your successes and forget the losses. You are as good as your last result. As an avid tennis fan, I live by those words “short term memory” as a way to shake off disappointing results. Learn from the setbacks and always look to improve.

Resiliency

Resiliency will get you over the speed bumps in your business. Network marketing is a professional business just like other businesses. It’s NOT easy, it takes a lot of work and dedication to succeed, and it takes someone willing to invest in themselves and their business on a continual basis to achieve success.

Given the right business opportunity, anyone with this mindset is likely to achieve success.

What say you? How honest are you with your new recruits on what it really takes to succeed? Share your thoughts.

’til next time,

Janette

P.S. As always, kindly share by retweeting and share with your pals.

photo credit: www.freedigitalphotos.net

When I first started in network marketing, like a typical newbie, I wore my company logo t-shirt everywhere, the hat, and even had the company logo on the side of my car! Thankfully, it was short lived. Cedric Harris’, one of the top networkers would say- “don’t be doing community service.”

By now you’ve probably heard enough about the importance of branding you. If you haven’t, do a Google search for some top networkers, and you’ll see that there’s no mentioning of the company they’re affiliated with. Start with a blog to build an online presence. It’s the fastest and most inexpensive strategy to build traffic.

Inexperienced distributors are eager to promote their business opportunity and in doing so, they promote the company first. They advertise their replicated website, put the company logo on their car, participate in craft fairs using their company info everywhere.

You might sell some products at these events, have a few looky-lous asking questions about the opportunity, or fill out an interest card but when it comes to them starting a business- they might not be signing up with you.

Here’s why: because we are living in a search culture. It’s no wonder network marketers are often puzzled by the lack of results using these marketing strategies.

Doing expos brand the company you’re associated with more than your business with them. People are more likely to remember the company banners at the expos rather than the vendors themselves. Even if they’re picking up your business cards and company brochures, it doesn’t mean they’re keeping them, or contacting you. This is why I prefer to show up at expos as a guest and network with the vendors.

This method helps the network marketers that already have a strong online presence. Since we’re living in a search culture i.e. we Google whatever we need and unless you’re on the first page of Google or second, your business is going to another distributor in the same company. Because the prospect at the expo is more likely to recall the company banners she saw at the expo than the distributors.

While you’re expending money to set up a booth, spending hours to set up and manning the booth, not knowing that this marketing strategy is potentially giving away business to your fellow networkers. Hence, the “community service” mantra from Cedric.

The same thing applies to wearing your company logo or displaying them on your car. When was the last time, if ever, that you actually grabbed a paper and jot down the distributor’s name or phone number you saw while driving? You’re more likely to recall just the company name and then Google it later.

Here’s a personal story. I saw a lady wearing a company logo t-shirt at my son’s baseball game. Now, if we knew each other, I’m more likely to ask her about it but since we didn’t- I decided to Google it out of curiosity. It was only an experiment but if I were to buy the products or join the opportunity, what are the odds that it would actually be the same person?

What’s the solution?

Start a you branding campaign. Make sure you’re all over the internet so you’re in competition with your fellow network marketers. Learn how to market your blog by using internet marketing.

If you’re going to put a logo on your car, consider your name or your blog. Athletes might be wearing their company logos but they’re getting paid millions of dollars. And they’re getting millions of dollars because of their personal brand. Lance Armstrong is a brand first before he gets the endorsements.

With millions of network marketers vying for prospects, you’ll have a better chance of attracting prospects offline if you already have a strong online presence.

‘til next time,

Janette

p.s. As always, would love to hear your thoughts or leave me a question. If you find this helpful- be sure to share with others- Retweet, Facebook, Digg . Have a fabulous weekend my friends!

photo credit: www.freedigitalphotos.net

After reading Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit from Their Success by Donna Fenn, my head starting spinning with ideas.

This book offers some excellent insights for business owners; marketers looking to appeal to the GenYers; and for network marketers looking to recruit this growing group of budding entrepreneurs.

What impressed me most about the GenYers is their ability to identify what’s missing in the marketplace. They recognize that the old school business model that companies are still doing isn’t working. And because they are so well versed with web 2.0- they’ve created tools and systems that make the outdated business model function better.

My generation, us GenXers are more likely to associate starting a business as risk taking. There are benefits to be in your late teens or 20s starting a business compared to starting a business in your 40s, 50s, when you’ve got a mortgage and kids. These GenYers rather enjoy taking on challenges and experimenting with their ideas.

Stats on GenYers

-Born between 1977 and 1997

-There are 77 million of them and counting. They’re using their college campus as an incubator to test their entrepreneurial ideas.

-They make up 30% of internet users and grew up with the internet and are tech savvy.

-They are fearless and don’t see entrepreneurship as risk taking but one of the best ways to express their creativity.

-They grew up with parents that have corporate jobs and encouraged them to be entrepreneurs.

-They’re not afraid to shake things up- challenging the status quo- and they don’t want a desk job.

-They’re creating start ups at unprecedented rate and growth. You could say they’re more than budding entrepreneurs.

What we can learn from GenYers

As business owners especially the ones still lagging behind and not onboard with web 2.0- this book will offer insights into how these young entrepreneurs are identifying market needs, offering a better solution, and what you can learn from their success.

As a marketer to GenYers this book will offer insights as to how they like to be marketed to. Where and how they’re spending their money. This generation is highly skeptical of advertisers (who isn’t?) so if you want to market to this group- understand what influences their buying decisions.

For network marketers

With over 30% of GenYers using the internet to search for products and anything else that interests them, including entrepreneurship, does your network marketing opportunity appeal to this market?

With most of them interested in starting their own business- is your business web 2.0 savvy and technology driven to pique their interest? They don’t exactly strike me as the type that’s interested in a home party business J .

Sponsoring the GenYers

Since I haven’t exactly courted any GenYers, I have zero experience to share. But given what I’ve read from the book- here’s my take on some possible ways to sponsor a GenYer:

-You better know just as much about web 2.0 if not more than they do. You might lose them at “what’s a blog?”

-Email is probably passe with them- consider mobile marketing and be sure your blog is compatible with their mobile apps.

-Recruit a few GenYers and have them share and viral the opportunity with their peer.

-Social media is big with them as well as niche forums, blogs, and online places where they hang out. Speak their language.

What do you think about recruiting to this generation? Does your business opportunity interest this group? Your thoughts?

‘til next time,

 Janette

p.s. You can read more about Upstarts!: How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit from Their Success

p.p.s. Additional article Gen Y Mashable How Gen-Y Startups Use Social Media to Shatter the Status Quo