The Importance of an Network Marketing Product to Your Long Term Success

Every legitimate business, no matter what industry, sells a product or service to a consumer or a client. Product is a very important part of your network marketing business and should never be overlooked.

However, it is easy for people with less experience to get caught up in the emotion of products. Some people will jump straight on to a “trendy” product. Some people will go out of their way to justify why their product is better than anybody elses even though it’s three times more expensive.

Here are three criteria you can use to determine whether you will have success with a product:

1. First and foremost, is there a tangible product?

2. Can you make recurring sales with the product?

3. Is the product value priced?

First, do you get any product? What do you get for your sign up fee? If you don’t receive any tangible product for your sign up fee, then it is an illegal pyramid scheme.

There are plenty of illegal pyramid schemes disguised as legitimate network marketing business opportunities. One of those was BurnLounge who was shut down by the FTC in June 2007. BurnLounge sold MP3 music downloads through an MLM pay plan. What BurnLounge promoted was actually quite innovative – it allowed individuals to construct their own digital music stores on the internet.

However, it was revealed that the top income earners in BurnLounge were not making their money from the sales of music downloads, but rather, from signups of new “store operators” at up to 0 per year! That fee would be okay if the new store operators received 0 worth of music when they signed up. But they didn’t get anything, but access to a website.

Some reports say that BurnLounge only compensated their resellers 5 cents for every 99 cent music download. That kind of makes it hard to earn a living and its little wonder why the BurnLounge business model drove the behaviour of recruiting.

There are many travel deals (travel scams) where you pay 0 for the privilege of being a travel agent. You do not get 0 worth of air travel or any form of travel whatsoever. Be warned. If you do not get any form of tangible product for your sign up fee and your sponsor is compensated for your signup, then it is an illegal pyramid scheme.

The second criteria that’s essential to achieving residual income is recurring sales. Network marketing is not an easy game. It may takes years of dedicated work to build an organization that provides you with a decent level of residual income. The basis for that residual income is the continuous sale of product to the end consumer.

There is virtually no possibility of recurring income if the product you’re selling is a “one-time-sale”. You sell a product to a customer once, and that’s it, you seldom see him/her again. Therefore, to make money you have to find new customers and recruit new distributors all the time. If these activities stop, then your income stops.

If your company’s product line only consists of one-time-sale products like jewelry, high end information products, water and air filters, cookware or biomagnetics, you would be better off selling these through direct sales. It will be virtually impossible to develop a steady, residual income stream with a network marketing distribution model.

Finally, is the product value priced? All legal network marketing companies have great products. However, some network marketing products are rip offs, no matter how good they are. Why should a customer buy a product that’s twice or three times more expensive then he can get at the local health store? A product must be competitive in the market place for it to be saleable.

Here’s a question that you can used to judge the value of a product. Would you have bought the product if there was no business opportunity attached to it?

Some network marketing companies are so inefficiently run and have such high overhead, that they literally price themselves out of the market. And the only way to get a good discount is to signup as a distributor. If you can’t retail product to a customer because its overpriced, you will struggle to build to build residual income. Endless recruiting IS NOT a sustainable business model.

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