- I’ve received queries from several readers recently about decisions that need to made at the beginning of their career. Can they trust the advice being given by their prospective sponsors? Or are those sponsors, just trying to encourage them to spend more, to provide higher commissions for them and other existing distributors. Sensible questions you might think! Let’s look at the options.
The first is to simply register with the networking company of your choice. With some companies this is free - if it’s not, it rarely costs more than £20, which is designed to cover the admin and computer costs.
The second is to buy a starter pack which normally includes any registration fees. These have all the paperwork necessary to run your business for the first month or two -- such things as product leaflets, recruitment booklets, receipt pads, order forms, a distributor manual which should give you both legal guidelines and tips on effective ways to build your particular network. The better ones contain audio and video tapes which will give you some basic training and product knowledge. Some of the more advanced of these packs also contain a small amount of product designed for you to use yourself to become accustomed to it and to make your first few retail sales with. If your pack doesn’t contain any product then you should include in your start-up budget a small amount, £100 should be more than enough, to allow you to become familiar with, and start to retail your new products. The third option is what is called in the trade ‘Front-loading’. This is where your prospective sponsor or company suggests you invest more money initially to obtain a higher, and therefore more profitable position, on the company’s marketing plan. This is sometimes disguised as some kind of ‘special offer for that month only’.
Quick success depends on understanding the system . . . not throwing money at it. So let’s look at the choices.
If you’ve not been in networking before, unless you ONLY want to be a wholesale customer of the company’s products, I see absolutely no point in just signing in. You won’t know what you’re supposed to doing and you won’t make any money. If you don’t feel strongly enough about starting your business to buy a proper starter pack - I simply wouldn’t bother -- you’ll fail anyway. I’ve seen hundreds of people make silly statements like, “Well I’ll just hang on and see what I need . . .” They never get started. The better companies have put what you need in the starter pack that’s why they call it a starter pack. This is your second option -- and is almost always your best choice. Most networking companies are reputable. They include the items you need to get a good start, usually at a hefty saving over the cost of buying them individually.
The third option is where I get cross. ‘Front-loading’ as it’s known in the trade, is the next best thing to the illegal pyramid schemes of the 1960’s. People get sucked into these schemes often by a friend they trust. (Who, in their defence, probably doesn’t know any better.) There is no reason to buy a lot of stock at the beginning of your business. A good company will be able to supply anything you need from the warehouse within 4 or 5 days, often quicker. And higher commissions only become relevant when you have built your business, by which time you’ll be getting them anyway. Or join one of the companies who pay larger commissions at the bottom position. In most companies you do need some items for demonstration or immediate retail sale depending what the products are. However under the regulations that cover network marketing you cannot spend more than £200 with a company in your first 7 days. They are trying to protect you from yourself. (The limit was raised last year from £75 to £200 to bring it into the 1990’s) So if you wait until after the first 7 days and then spend £2,000 you’ve only got yourself to blame! You are still protected legally because you have the right to 90% of the cost of your products back if you return them to the company within 90 days. But don’t allow the fact that the law protects you to induce you to abandon common sense.
IThis article was originally published under the title “Beginners Luck?” in the UK in February 1998.
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