When I was younger my parents were sales representatives in a company called Amway.
You’ve probably heard of it. It’s still around and it’s a roughly a $9 billion-dollar a year company.
They have thousands of reps around the world selling thousands of Amway branded products from soap and makeup to knives and other household items.
Their mosquito repellent, call D-15 is second to none.
As a guy that grew up in Winnipeg, Manitoba, this stuff is essential and very effective.
Amway is almost 60 years old and just isn’t stopping anytime soon.
I was too young to get into the Amway business but I watched my parents have people come into our basement to buy a box of laundry soap from the “warehouse” setup down there every couple of weeks.
Their energy for Amway faded over time and then they decided to try out a company called Jewelway. Shortly after they started, I joined in and bought a 14k gold bracelet & a pocket watch to cover my inventory and/or “show pieces”.
It was a jewelry based network marketing company and I was selling gold and silver jewelry and other kinds of bling at the age of 16 or 17. It was definitely a great a learning experience. I was introduced to business concepts I had never considered. I didn’t do well. I was young and didn’t want to hustle hard and pester my friends and family. I got out and eventually, Jewlway went bust, getting sued and closing down.
I also joined a company called Usana Health Sciences where I was selling nutritional supplements and dietary products along with recruiting other people to the business opportunity. About 6 months in, It just wasn’t working for me. I didn’t like the weekly meetings I had to attend and I couldn’t see myself doing it for the long term. Usana is still active today and is even traded on the New York Stock exchange.
Xango, the mangosteen juice company, was the one network marketing company I had the most success with. I built a decent global downline and was making a little bit of money. Nothing to quit my day job but it was working and it put a bit of extra money in my pocket every month. Xango has since changed to Zija where they still sell the Xango Juice but have many other products as well.
I’ve always been open to business opportunities. I think it’s important and educational at the least. I try to focus on finding the good parts and leaving the rest.
I’ve been pitched on ACL, EXCEL Herbalife, NuSkin, Avon, Melaleuca, Manatech, and many other network marketing companies and learn many interesting business models and marketing approaches.
At the end of the day, they’re all very similar and generally differ in products and slight differences in their compensation model.
The four most commonly used types of network marketing compensation plans are as follows.
- The unilevel plan
- The forced matrix plan
- The binary plan
They all have different advantages and disadvantages but they all seem to start with;
“You tell two friends, and then they tell two friends and then they tell two friends…” and so on.
In all cases, you either become a customer, a rep that just sells the products or the business opportunity route where you’re a customer, a rep and you recruit other people to the business opportunity.
The network marketing or direct selling business model works. Many of these companies are million-dollar organizations, some even billion-dollar ones.
If it didn’t work, there wouldn’t be so many companies using it and selling tons of product.
The interesting thing I had observed with the XANGO opportunity was that I was gaining most of my leads online through blogging which started to peak my interest in learning how to make money online with out MLM.
Why I quit Network Marketing
The business model works but it wasn’t really working for me.
There were many reasons for me and here are some of them.
Too much selling hype.
When you get into the business and start promoting & prospecting, the leaders or upline tend to help you with marketing materials, scripts and other sales tools and the products of course.
All of this support material only works if you sell the hype. Unfortunately, after you’re in for a while, you realize that the hype fades for the majority of people who joined and they quit.
MLM retention rates are crazy low and if you build a big downline, you need to manage and support them which takes a lot of time.
Network marketing and MLM have a bad reputation in the marketplace.
As soon as you start talking the MLM lingo, most peoples eyes roll into the back of their heads and slam the door in your face. The training simply tells you to move on to the next.
It’s hard when the words MLM and Pyramid Scam are so intertwined in society.
I ended up spending a lot of time trying to tell people it’s not a pyramid.
Fake it till you make it
The recruitment process in a network marketing company is showing your prospects a level of wealth and prosperity.
When looking through the literature of any MLM company you will see people laughing and enjoying themselves.
There will be motivational speakers claiming to be able to lead you to financial freedom. The truth is that is not the case at all.
In order to even break even with a network marketing company, a person has to put in extremely long days and nights for a small amount of profit.
I figured, if I’m going to put in these kinds of hours, there has to be a better way.
Cult like culture
Network marketing culture can get a bit cult like.
If you aren’t drinking the kool-aid, you will probably be looked down on and either feel the pressure to get on board or get out.
Friends & Family
Too much focus in Network marketing is put on soliciting your friends and family. It makes sense from the companies perspective.
They know that these relationships are very influential. Some friends and family will sometimes just buy out of guilt to “support” your business. This can be a recipe for relationship disasters.
MLM is a SCAM or is it?
With MLM and network marketing having such a bad reputation, if your personal network thinks it’s a scam, their perception of you may change and you could actually ruin these relationships.
It wasn’t all bad.
I learned a lot along the way about business, selling, prospecting, cold calling, marketing and time management.
I was also introduced to some of my favorite business books.
- The E-Myth
- Who moved my cheese
- The 7 Habits of Highly Effective People
- Think and grow rich
- How to Win Friends & Influence People
- and countless others…
My heart just wasn’t in it and I knew there was a better way to make money on the internet without all the negatives I mentioned above.
I found Internet Marketing and Affiliate Marketing
When I was working the Xango business, I started blogging about the juice and spending lots of time learning about internet marketing.
I learned about Google Adsense and how I could get paid for hosting ads on my blogs. I thought this was amazing and started to do more research and build niche blogs, create content on them and monetize it with Adsense.
One of my blogs was about lending money. I wrote about debt, loans, and finance in general.
Because it was finance focused, financial institutions were paying huge dollars for Google Ads and I was getting between 50 cents and $3 dollars a click for my audience. It didn’t take long to start consistently making a few hundred dollars per months from just that one site.
I was hooked on building online businesses.
I first learned about affiliate marketing when I came across ClickBank, a marketplace where people can list their products for sale and affiliate marketers can sign up and promote the products for a 30% & 90% commission.
A simple business with massive potential.
Affiliate marketing is very similar to network marketing in that you sell a product or products and earn a commission but, it has many differences.
What is Affiliate Marketing?
Definition: Affiliate marketing is partnering with brands that offer a commission as a reward for your endorsement and referral. Affiliate marketers or resellers generally act as a middleman between customers and products. Affiliate marketers earn a commission by referring web traffic and sales through their own promotional efforts using a coded URL or web address to track each referral.
In affiliate marketing there is a product, you get paid commissions and in some companies, there is a super affiliate model that is similar to the MLM but much more simple. Usually, there is one tier and you make a 5% to 10% commission off of the product they sell. You can actively collaborate with your team or not at all and you can do it from anywhere with no cults, hype, or having to sell to your friends and family.
Can you make money?
Yes. But it’s not easy.
That being said, affiliate marketing has made and continues to make many internet millionaires.
Here are just a few people that work in and are very successful in affiliate marketing.
- Tony Robins
- Tai Lopez
- Amy Porterfield
- Peng Joon
- John Lee Dumas
- Dan Henry
- Julie Stoian
- Grant Cardone
At the end of the day, I stopped doing network marketing and started to focus on building an online business.
There is estimated 3.2 billion people or almost half of the world’s population on the internet.
That is a huge pool of potential customers and it’s growing daily.
For me, I want to focus on building online businesses, because the potential is much greater. Plus it’s fun, educational and exciting.
Let me know what you think of if you have any questions.