Everyone who joins a Network Marketing opportunity has good intentions. Everyone thinks (albeit briefly) that they will succeed. Otherwise, why would they join in the first place?
Intentions are overrated. The power of intention might get people started, but it is short-lived. We need more than that. We need staying power. We need momentum. We need wins.
When I hit the streets as Super MLM Man (check out the video here), I wanted to find out what people really think about Network or Multilevel Marketing (MLM).
There are not so many direct selling companies that start their journeys as big businesses from day one. Almost all are small and medium-sized enterprises (SMEs). In fact, many of them start as family-owned businesses. And they come with their limited resources and their own weaknesses, as well.
Here are several of the areas where those start-ups in the direct selling industry fail:
After a two year investigation, Herbalife has agreed to pay a $200 million fine to the FTC and act in accordance with prescribed measures. With this morning’s announcement of a settlement, investors and proponents/opponents of the MLM industry alike are attempting to process what it all means for the Company’s future. Before we provide you an in-depth analysis of the stipulations found within the FTC’s Order for a Permanent Injunction and Monetary Judgment, it’s important to remember that these prescribed actions only apply to Herbalife and not multi-level marketing companies collectively. In response to a question in which she was asked what kind of implications the settlement will have on the network marketing industry , FTC Chairwoman Edith Ramirez stayed mum on its long-term implications and stated rather plainly that the FTC would soon be providing additional guidance on legitimate network marketing companies. That aside, let’s get down to business and clarify what the FTC’s order does and does not say.
THE BIGGEST TAKEAWAYS
Do you remember when you bought your first car? Do you remember how you felt in the weeks, days and hours leading up to the purchase – that period of time when you knew you were going to get it but were still working on the financing or delivery?
Do you remember the promise you made to yourself and others about how the car would never see rain, how you would never eat in it or abuse it in any way?
In Part 1 of the crowdfunding series, I discussed the rise of the crowdfunding phenomenon and Title III’s recent enactment under the JOBS Act. While Title III may appear to be an attractive avenue of capital fundraising for entrepreneurs and startups, founders of a network marketing company may find it a boardwalk littered with more stops than gos. As for crowdfunding as a MLM product service or offering, in my opinion, its a chance to go directly to jail.
TITLE III CROWDFUNDING AS WAY FOR MLMs TO RAISE CAPITAL
If you remember, the benefits of a Company looking to use Title III appear numerous. Title III provides the ability to raise up to $1 million without having to deal with burdensome SEC requirements. For an MLM looking for startup funding, what’s not to like? Well . . . er, money for one. The logic goes something like this: you have to have money if you want to raise money.
The direct sales industry is on the rise. I’m approached every day by people looking to enter the direct sales market with a startup company. Here at InfoTrax, we launch an average of three startup companies every month and due to the growing main-stream acceptance of direct sales, I expect the trend to continue.
Starting a direct sales company, or any company for that matter, is never easy. There will always be unforeseen issues, unexpected costs, and unruly personnel. These types of issues are not unique to your company. The business gods are not picking on you for any particular reason; you will simply have to be prepared for anything to happen.
At InfoTrax, we have launched hundreds of direct selling companies on our software. Year after year, I see companies face struggles that could have been avoided. Watching the growth of these companies has taught me that every company should answer three questions before they launch: 1) What exactly is your product, and does fit in the direct sales space? 2) Do you have someone at the lead with Direct Sales executive experience? 3) Do you have capital to fund the project?