In my last blog post, I showed you why network marketing is the best way to earn money online. In this post, I'll tell you the 10 things to look for in a network marketing company.
Top 10 Things to Look for in a Network Marketing Company
Once you realize that network marketing is the best side hustle business out there, how do you find the best company to partner with?
I should know, because over the years, I have actually joined 12 different network marketing companies.
Some of the companies I joined to get the products wholesale, but most I joined because I was looking for a company I could promote on my blog — and I wanted to see which was the best one to work with. I'm a bit obsessive when it comes to research… it's the blogger in me that makes me dig.
Not All Network Marketing Companies Are The Same
Not all network marketing companies are the same, and some companies are much better than others. Some companies have better products, better timing, better compensation plans…
- You could join a company that pays 30%… or one that pays 50%.
- You could join a company that's in a market that's completely saturated with competition.
- You could join a company that requires you to buy products you don’t need due to fine print that requires purchases in order to get paid.
These are the things you need to know before you sign up.
How to Choose a Network Marketing Company: 10 Things to Look For
I have studied the direct sales industry for several years and have come up with 10 key factors to consider when evaluating a company:
- Is the timing good?
- Is there competition?
- Is the company financially stable?
- Do the products work? Are they life-changing, must-have products?
- Are the products consumable (for repeat purchases)?
- Are the products easy and fun to promote?
- Do you have to stock inventory or do they drop ship?
- Do you have to buy products to get paid?
- Does the company’s mission fit with your values?
- Will you be paid well?
Let's break each one of these down very briefly, shall we? (For more detail, watch my webinar.)
1. Is The Timing Good?
As I say in the webinar, if you had invested in Bitcoin in 2009, you'd be really rich right now. I know, I have some friends who did. They are really, really rich.
Here's another example… can you imagine trying to sell encyclopedias right now? Or typewriters? Yeah, not so much.
It's important to research the marketplace and analyze consumer spending trends. I go into detail about this in my free webinar.
2. Is There Competition?
If the products you are promoting are currently sold in stores, it makes it harder to get people to order from you.
Why should they buy your essential oils when they can get them on Amazon or at the health food store? Sure, you say yours are better but do people really care?
Ideally, you want to promote products people can't buy in stores. Better yet, products that they can ONLY buy from you.
I spent over a decade promoting products on my blog… the ones that have paid the best over time are the ones people can't buy in stores.
3. Is the Company Financially Stable?
This is a big one. If you join a network marketing company and build a big downline, what happens if the company goes out of business a few years later?
You need to research the company and the team running it, and their history. Ideally, the company should be debt-free without a lot of investors. In other words, look for a debt-free company that's privately owned.
Why is this important? Because if the company has a lot of investors and is publicly traded, it may not be very stable. They could owe a lot of money to their investors. I know know if you watch Shark Tank, but this happens a lot on that show.
Another thing to look for is how much money do they have? Growing a business in this day and age requires deep pockets.
While we all love a scrappy start-up, that is definitely not the best choice for a network marketing company. You want to partner with a company that has been around for a while and has cash reserves to be able to weather the tough times, fight lawsuits, etc.
4. Do the Products Work? Are they Life-changing, Must-have Products?
People will not go out of their way to buy products from you if they don't have an amazing experience.
I know for myself, there are some products I simply can't live without. For example, I love my Apple computer and iPhone. I've been an Apple user for over a quarter of a century. I have tried using Windows computers but I hated them.
I feel the same way about my deodorant, the brand of butter I buy, and a few other things. But there are many, many things that I just don't care enough about. For example, cleaning products or essential oils. I just don't care that much.
The network marketing products I promote now are the best I have ever tried — and I literally cannot live without them. Or let's just say I would be VERY sad if I ever had to live without them. And it's not just because of the way they smell or that they look nice, it's because they give me RESULTS that I can't get anywhere else.
Find a line of products you feel that way about — like you're literally BLOWN AWAY. Otherwise, you won't be able to promote them. You have to be a convert, because that is what will turn you into an evangelist.
5. Are the Products Consumable (For Repeat Purchases)?
If the products you are promoting are not consumable, that's a problem.
Why? Because you can only buy so many pairs of leggings. You need products that get used up quickly and people need to buy more.
Also, some products are consumable but perhaps not as consumable as others. For example, how often do you buy lipstick? Or essential oils?
Finally, there are lots of products you can live without when the budget gets tight. You can probably go without the supplements or weight loss products, for example.
But you can't live without other things. Like coffee. At least I can't live without coffee!
6. Are the Products Easy and Fun to Promote?
I don't know about you but I don't get excited about cleaning the house. Weight loss is also something I'm not super excited about… maybe you're different.
You need to look at different product lines and find one that fits what you're passionate about.
7. Do You Have to Stock Inventory?
When I started out in network marketing in my 20s, I recruited my Aunt Jennifer.
We had such a blast together in that business. Sadly she passed away (Type 1 Diabetes) within a year of us working together. I still miss her and I wish we could still do network marketing together. I know we would be doing it together if she were still alive! (And I know she's up there in Heaven right now, cheering me on.)
One of the reasons Aunt Jennifer loved network marketing is because she didn't have to stock inventory. When I recruited her, she had been running a direct selling business out of her home, selling upscale clothing. She had a whole room full of clothes she had to schlep around to home parties.
This is true of some network marketing companies today. Make sure you choose one that allows drop shipping directly from the company so you don't have to deal with inventory.
8. Do You Have to Buy Products to Get Paid?
There are some companies in which you have to sell purchase a certain amount of product every month in order to get a paycheck. If you watch my webinar, my company does not require this. Which is one of the reasons I went with them.
I think this model can work for some companies… like for example the Amway model. If you're buying most of your household items from a company, I could see how it would be fine to spend money every month. But this can make it tough for people who are on a tight budget when they are just starting out.
And what if you just don't need that much stuff? For example, how often do you need to buy essential oils?
I like the fact that in my company, I can go months or years without buying anything and I still get paid. We also don't have any sales quotas to get paychecks. (We have quotas for earning incentive trips and for bonuses — but nothing in order to get paid.)
9. Does the Company's Mission Align With Your Values?
I know… it doesn't seem like something you need to worry about right now, but I've seen people bail on their network marketing companies over this one.
Maybe you're passionate about the environment. Is the network marketing company you're thinking of working with share that value? Are they doing things to help reduce waste or be more sustainable?
Or perhaps you're a Christian and that's a huge part of your life. Did you know there are network marketing companies out there that are run by Christians? There are!
Culture and values are the most important things… way more important than products or the money you earn.
When you partner with a network marketing company, you're going to be with them for years, and very likely decades. You need to make sure it's a fit not only mentally but also emotionally and spiritually.
10. Will You Be Paid Well?
Like I said above, some companies pay better than others. It depends on a lot of things… their margins, their investors and the amount of debt they have, the competition in the space, etc.
You need to read the fine print and analyze the compensation plan before you sign up. Why put in the same amount of effort when you're not going to make as much money?
I actually joined one company (I won't name names) and I didn't stick with it for a variety of reasons listed above, but one of the main reasons was the compensation plan didn't make sense to me.
I'll write a post in the future about network marketing compensation plans, and why some are better than others.
Watch My Free Webinar
To see a full breakdown on the above 10 factors with all the details, please watch my free webinar, How to Choose the Best Side Hustle.
How to Choose the Best Side Hustle