What is network marketing
Multilevel marketing, network marketing or pyramid scheme selling, all refer to the same kind of marketing scheme. This is a controversial marketing strategy for the sale of products or services, where the revenue of the business is derived from a non salaried workforce selling the company’s products and services.
Sad to say, some of these schemes have no products or services to sell, hence relying sorely on new members registration to pay old members. when new members stop coming, you can imagine what happens to the virtual company.
These marketing schemes are the subject of this article. Take note of the following truths common to most of these pyramidal network marketing schemes.
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The principle is; do your own business, only use excess profits to invest in unstable businesses like NETWORK marketing schemes. Do not invest your capital. Don’t put your heart where you are not in control of it.
Period of existence
1. In parts of Africa, Asia and beyond, most network marketing schemes exist just for a couple of years. Their life span is two or three years or even less, and are soon extinct or nowhere to be found. The most annoying part is, they disappear with people’s money giving no accountability.
In addition, at this age, most old members in these platforms find it difficult to withdraw their money in the form of accumulated points, especially when these companies can’t continue paying. Hence they convince you to come invest, so they will be able to exchange their accumulated points with your money, while your own money gets stock in there.
Always do proper investigation because people are dubious.
Invest wisely
2. Be careful! when investing in any marketing scheme older than three years. The point is this; at this age, either the scheme is nearing its end, or a new scheme is strongly taking over. The main problem is, when a new scheme is emerging, new people stop registering in the old schemes. Since most of the schemes have 90% of their revenue through referrals, it becomes difficult to continue paying their members regularly as before.
3. Never invest more than what will cause you so much pain if it is lost.
4. Never invest your main capital into a network marketing scheme, preferably, it’s better to invest interest from an existing business that is still generating monthly or quarterly income. This will help to be stable financially incase of lost.
Do not reinvest your profits; use it to do a physical business you can control.
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Withdraw promptly
5. Always withdraw profits promptly; profit earned in network marketing is compared to fish caught and held alive in water. If care is not taken, it could slip off easily. Do not save or allow your profits to accumulate in your network platform account.
6. Do not encourage people to join and invest much money in these schemes just to benefit mega referral bonuses. The referral bonus you will benefit is not equal to the pain and enmity that will follow when his/her money flies away with the wind.
Time factor
7. Time is of the essence in network marketing. If you must invest, do it before the scheme is outdated. Don’t wait until they stop paying.
8. Always check for money back duration. What you actually receive within the first 7 months is your investment capital not the profit. Any scheme that takes more than six months for you to get your capital back is not profitable, it’s risky.
Profits and capital
9. Think carefully before, or do not borrow money or take loans to invest in a network marketing scheme. Most are scams!
10. Avoid going after high profits online network marketing platforms. Most are scams. 100% annual profit schemes are ok.
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Products, services and activity
12. Do not invest until you know, and are versed exactly with the product they deal with to make profits.
13. Do not invest where you will become a product seller without payment.
Use your head not your heart
14. Do not invest in more than one at a time. If you do, the tendency is, profits from one will be use as capital for the others. In the end, you do not benefit anything from your investment.
15. Profits earned from network marketing business can hardly carry out a project that the capital would have carried out. The reason is, you invest in bulk and are paid in bits. THOUGH SOME CAN DO, IF YOU INVEST MUCH MONEY, WITH MUCH RISK TOO.
16. This kind of business will hardly make the poor rich; instead it makes the rich richer and causes enmity among friends.
17. Invest more to get more at higher risk, no risk no money. But calculated risk is better.
Other people’s money (OPM)
18. Owners of online network marketing platforms are entrepreneurs with business ideas but no capital. To get capital, they need other people’s money (OPM), they need your money to do their business.
Others have no business ideas at all, they simply take people’s money and disappear into thin air.
Network marketing is profitable and risky at the same time, be careful!
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My humble advise
The principle is; do your own business, only use excess profits to invest in unstable businesses like online network marketing schemes.
My humble opinion; people thinking of getting into network marketing can come together with their money, propose a good business idea and invest in it as a team.
This business will generate much income at lower risk, since it’s managed by the individuals themselves. Part of the resulting profits could be used to invest in legitimate online network marketing schemes, while the business is still generating much profits.