Hey guys, so I thought I’d take a break from mowing the lawn. I have a good list for you of how people waste money in network marketing. I’m not trying to bash anyone, I just want to go over some things that I think are very inefficient for your business and are very costly. I’ve done these things before and I hear about other people doing it. So I thought I’d do an article on what not to spend money on in your network marketing business.
So the most common one is number one. Number one is basically buying too much product when you sign up and trying to distribute it from your house or from a store. Now, that might sound like a good idea, but it defeats the whole purpose of doing network marketing. Because the majority of the money in network marketing comes from a team that you build, you get a commission from every person on your team. And that’s how you get residual income every month. You don’t get that when you are selling products out of your house, or out of a store, because those are customers.
If you want to 10X your income in network marketing, you want to recruit distributors that want to build their own business. So let’s say that you sold a bottle out of your house of your product, a bottle or a tube or a jar, whatever your MLM company sells, to Jane and you make a $20 profit. She goes home and you know, she loves it. But she might not return, or she might find it somewhere else. So you made a 20 dollar profit.
Now let’s say you bring in Jane, on the internet through your website and she thinks this product as a business is a great idea. She wants to promote this business as well and you teach her how to recruit people. So Jane brings in five people. And you get $10 each from each person that Jane brings in, you got $20 from Jane when she signed up, but Jane went and recruited five people of her own and you get $10 for each one of those people. So right there, that’s $70. And then when those five people, let’s say two out of five recruit five people. So that’s 10 more people.
And since that’s on level three, you probably get $5 for each. So that’s $50. So right there, you’ve made 20 from Jane and 50 from the five that she recruited, and then you got a, if the third level recruited 10 people, you know, those two people recruited 10, you would get another 50 dollars. So that right there is like $170 and you’re gonna get paid every single month that those people reorder. So, you know, you’re looking at $170, the first month, and then maybe $60 a month afterwards, every single month. You’re going to get $60 a month because those people are reordering. So Doesn’t that sound way better than just getting Jane as a customer one time for $20 commission?
People that make the most money are people that build an organization of people that are recruiting their own people and building their own businesses under you. And it can go down to infinity levels, you get paid on level one, you get paid on level two, you get paid on level three, and the top leaders have 5000 to 30,000 people on their team, maybe even more, there’s people that have 500,000 people on their team or more, and they’re getting a little commission from every single person that reorders.
That’s the power of network marketing, and that’s called leveraged income. you’re earning a residual income check because you’re leveraging the efforts of other people who are building their own businesses under you so you don’t have to buy $2,000 worth of product and then try to sell it out of your house or you’re gonna just sell it to some friends who try it once. And they’re like, that’s great. And then you don’t hear from them again.
But if you build it like a network marketing business, and you recruit people that recruit their own people, and you get duplication then you’re gonna get paid on all those people that those people recruit. So that’s number one. You don’t have to buy a ton of product and you see it all over YouTube. You see people that are calling companies a scam because “we spent $10,000 on this business opportunity and we lost a lot of money.”
And this is back in the days when a lot of people did a lot of front loading. They told their reps to buy a ton of products because it could help them rank advance. It’s called front loading. That’s why a lot of people in the old days had garages full of products that they couldn’t sell. Because back in the old days, the leaders were telling them to buy a lot of products, because they could rank advance faster. But that’s illegal today, you can literally make a lot of money just by buying one product a month.
I have to buy the middle package every single month to maintain my rank. But that comes out to be about $150. And that’s it. The rest of the money I spend on my business is advertising. And we’ll get into that in a minute here. So that’s the first mistake.
The second mistake is doing Facebook boosts. So you, let’s say promote yourself, you have an image of your product and you post it on Facebook. And then you push that nifty little button under the post that says boost. So you do a Facebook boost, and you don’t get anything. You don’t get any sales, and you just spent $5 and then you’re like, well, I’m gonna try $25 and then you get nothing and then you try $100 and you get nothing.
Facebook boosts are basically pointless if you’re gonna do Facebook advertising. You actually don’t want to use Facebook boosts at all, that’s just Facebook taking your money. You want to do actual Facebook ads and streams that you see on your wall. When you scroll down your wall you see other ads from other people. They have a video and they’re like, you know, click the button to find out more info. That’s how the professionals do it. And they try different ads and they find the ads that work the best and delete the ones that don’t work and scale up the ones that do work and put more money into the ads that work. So don’t even go to the Facebook boost because it’s pointless.
Number three is trying to buy leads on Fiverr or any other cheap site like that. Any site that’s promising you 10 cent leads you’re not gonna get anything out of it. All right. There’s a lot of scammy sites out there that are trying to sell you fake leads or cheap leads. You’re not gonna build a sustainable business by buying fiverr leads. You know, you get what you pay for. So if you’re buying 1000 leads for 10 bucks, you’re not gonna get anything you just gave a scam artist 10 bucks.
So the best leads are from people that read about you, they watch a video by you, you establish trust with them. Okay? They join you because they’re like, okay, Erik seems like a leader. He seems like he knows what he’s talking about. I’m gonna join him. So YouTube videos are good for leads. blog articles are good for leads because people are looking for what you’re writing about.
You know, I’ve built most of my team just from my articles. People find me on Google doing a search. And since they’re already looking, they already have their wallets out and they’re ready to buy. So for instance, two years ago, I had a couple articles about CBD oil. So when people found my review on CBD, they’re like, Okay, well, this guy obviously knows what he’s doing. I’m going to join him because he’s recommending his number one CBD oil right here. So I joined him. I didn’t have to bug them, I didn’t spam them, I didn’t talk to them, they came to me with their money ready to buy.
So those are the best leads – people that feel like they can trust you that they feel like they know you or like you and they’ll do business with you. If you’re just being really aggressive and spammy and promising a lot of money for very little work, you’re gonna attract people that are scammy – the get rich quick people that are not serious, they’re not professionals. So if you want to attract professionals, you have to be professional yourself. And that’s not spamming 1000 Facebook MLM groups, you know, you’re not building any trust or rapport.
Next thing is events. Company events are great. You know, they inspire you, they motivate you. But technically, it doesn’t grow your business. It does grow your business, if you are changed at the event, and you really didn’t understand network marketing before, then you could go home and just be like, wow, it basically builds belief, and it builds excitement. But if you don’t act on that excitement, and that belief, it’s going to just fade away and you just spent $300 on the event and you spent $500 on an airplane ticket, and you spent 300 on a hotel, you spent almost $1,000 on that one event.
So if it doesn’t inspire or motivate you and you don’t change the way that you’re building your business after the event, then it was worthless. Same thing with hotel meetings. house parties, a lot of people spend a lot of money throwing on house parties, because they gotta buy chips, they gotta buy pop, they print out these wonderful invitation cards, and they have to have all the products laid out on a table, they might have to rent a table or they got to buy all those products just to show the products off to these new people.
And then a lot of people don’t show up and you just spent $500 or more, you know, getting your house ready for people that didn’t show up. Same thing with hotel meetings. It’s just on a bigger scale hotel meetings. If you don’t know how to do them properly. You’re going to get a lot of people that don’t show up and you’re sitting there with you and your upline is going well, I don’t know where they are. You know, we just rented out this hotel for five $500 and three people showed up three people equals about $60 to $200 in commissions, but you spent 500 on the hotel room, you just lost $300.
There’s better ways to promote your business. You can promote your business on the internet everywhere for almost free. Youtube is free, you do enough videos you’re gonna build your whole business with YouTube videos or blog articles. Almost free.
So moving on. Okay, so this is probably one of the worst things you could do to waste money in MLM. It’s wining and dining your new reps. So here’s a good analogy. So let’s say you want to buy a new car, and you go to the Porsche dealer and you go to the salesman and you’re like, I really liked this car. I’m a professional racecar driver. I know I can handle this car, I want it. And if you don’t show any proof of income, the salesman doesn’t know you at all.
But he’s like, Okay, let’s go for a test drive. And then tonight, I want to take you out to dinner. And you’re really going to love the Porsche, and I want you to meet my wife, and we’ll take you out to dinner. And we’ll even put you up for the night in a hotel, a really, really nice hotel. And the guy who wanted the Porsche didn’t show any proof of income. You don’t know if he can drive or not. The car salesman is just putting all his energy and money into this guy who just walked in, came off the street and was like, I want a Porsche. The salesman just freaks out and goes, I’ll do anything you want. I want to sell this car to you, I’ll wine and dine you, I’ll put you up in a hotel, I’ll spend $1,000 on you, even though I have no idea who you are.
That’s the same thing that happens in network marketing. I’ve heard of stories of leaders actually flying to other states to do a meeting for a potential team. And they fly all the way there. A couple states over and no one showed up for the meeting. And these leaders, you know, they’re like, they flew in thinking that there was going to be 10 to 30 people, their potential leaders, and no one showed up. I saw that story on Eric Worre’s channel, Network Marketing Pro.
This is like one of those videos where Eric Worre asked the leader, you know, what was the worst experience you’ve had in network marketing? And the guy was like, well, we flew across the country to meet these so called leaders who had a house and no one showed up. So that happens more often than you think, of people wining and dining these new reps. It’s the same thing with the car guy. Just because you say you want a Porsche.
You know, you’ll get people that join you that talk big. Just like the guy who wanted the Porsche. I’ve had people that join my team, who have no experience at all, but they talk really big. They talk the biggest, because they have no idea how hard network marketing actually is. So they say things like, I’m going to be your number one leader, or I want to make $25,000 a month with this in six months, and they don’t have any experience. The biggest talkers usually quit the soonest.
So, don’t spend your hard earned money by taking these big talkers out to dinner, or flying them in or whatever. I mean, they have to prove themselves and they should build their whole business using their own cash. So if you’re spending money, wining and dining people that you don’t even know, because you think that they’re going to be big fish in your business, think again, because I’ve known several people that do this. They wined and dined new reps. And then those new reps quit in two to three months. And you just spent $300 on their dinner. And it happens a lot.
I’ve never done that. And I’ve recruited over 1400 people, some stay in and some don’t. You just keep recruiting. Top leaders know that you just keep recruiting, and don’t believe all the hype that these new people, you know, talk about. They have to prove themselves and even then they should, they should spend their own money on dinner. You know, everyone should go Dutch. Unless the leader has brought you in thousands and thousands of dollars over a couple years, then yeah, float the tab. If they’ve given you thousands of dollars or millions of dollars, then go for it, you know, pay for their hotel room and pay for their dinner. But if you just met them, and you’re doing all of this stuff, just because they talked big, you’re wasting a ton of money.
Now, the last thing I want to say is, this doesn’t have to do with spending money. But it’s something that goes on a lot in network marketing. And that’s not revealing that it’s network marketing to people.
I remember a long time ago my dad was tricked into going to an Amway party. The guy that invited my dad said nothing about it. He said nothing about Amway. He said nothing that it was MLM or network marketing. He just said come to this, it’s going to be life changing and my dad went and then you know, my dad couldn’t escape and he had to sit through this meeting of these leaders, you know, showing the products. My dad was not interested at all.
And that happened a lot in the old days. It still happens. You know, you’ll get someone on Facebook that you know, messages you and says, you would look great wearing our makeup. We want to hire you. They make it sound like a job, like you would be great. We are brand influencers. We want you to be a brand influencer with our company, we’re in a fortune 500 company, and we want you to be a brand ambassador. And they don’t say anything that it’s network marketing. They don’t mention the company. And they just paint it all these other colors. And they don’t really say it’s network marketing, or direct sales.
So if you’re going around trying to deceive people to get them in your business, it’s not gonna work. It’s not sustainable. People are gonna resent you, you know, they’re gonna find out that it’s MLM when one way or another and they’re gonna hate you. That’s the bottom line. So be upfront.
You know, say, if you want supplemental income, check out what I’m doing. Our business grew 1,000% the last few years – check it out. If you want a side gig that can pay a few hundred dollars and you know what better time than doing it now. So take the free tour – you can join for free, you know, do that. But if you’re just promoting your products on Facebook, no one cares about your products.
There’s thousands of other variations of your products. There’s thousands of other network marketing companies out there that have the same products. So you know, it doesn’t work. When I used to do CBD videos, no one really cared. You know, it was all over the place. I don’t even mention my products. I mentioned the income – I lead with the business opportunity because everyone needs extra income.
But not everyone wants your skin cream or your weight loss shake or whatever. I mean, there’s thousands of brands out there. You know people already have enough junk in their cupboards – on their shelves. But almost everyone wants extra income, especially residual income that comes in every single month, especially now during the lockdown. People are like scrambling. They’re screwed. Some of them aren’t getting the unemployment they wanted or anything. This is like the only thing you can do left online is a home business. So, thanks for reading guys. Hit that subscribe button.
If you’re not in a MLM company yet, click the link under this article and we’ll talk to you soon.