Wednesday, September 19, 2012
What's Hot in Network Marketing?
In my over three decades of network marketing, I've found that if you want to enjoy big success, you have to study the industry for what's hot and what will stay hot. If you select a company with a product that is hot right now, but won't be in 5 years, then you won't be able to build a long-term residual income. For example there was a company back in the 90's that marketed discounted long distance. They did very well for awhile, but the cost of long-distance continued to drop to a point where there wasn't enough margin. Incomes dropped, leaders left, and eventually the company folded, destroying the dreams of many.
In your industry analysis, it's important to look historically. In other words, what has always worked. Take a look at the top companies - what do they market? What did they market in the beginning. An example would be Amway. The started out marketing only nutritional supplements and today, 53 years later, their top sellers are still supplements. Amway is now a 9.2 billion dollar company. Success leaves clues.
The hottest product in network marketing has always been nutritional supplements and it will continue to be, particularly due to the terrible American (and many other parts of the world) diet. Supplements will always be in high demand.
I can hear you saying, "but what about cellular, it's hot?" Yes, it's hot now, but you have to look at the cellular industry historically in order to see a trend that would keep me and any other top industry leader away from a company that offered cellular. In the 1980's cell phones were selling for $2,000 to $4,500 and cell service was about $1 per minute. Today, you get the phone for free or for well under $500, if you sign a 2 year agreement. Most people will do that. So, now we have a couple issues. First, people are locked into cell contracts and those cell companies will do whatever they need to keep their customers. Second, the cellular trend is toward cheaper phones and service, so unless it's one of the major service suppliers - AT&T, Verizon, T-Mobile, or Sprint - that is actually forming the network marketing company, just as with my long-distance example, there won't be enough margin to fund a network marketing compensation plan.
The same is true for any service company out there. The way that they try to make it work is through coding bonuses. These are bonuses/commissions paid for training. In other words, each new represetative is required or encouraged to purchase a training package, typically for $500 or more. A good chunk of that goes to the sponsor, which then enables people to develop full-time incomes. The problem is that as soon as you stop recruiting, those bonuses stop, so it's difficult to build a long-term walkaway residual income.
So what's really hot in network marketing? Weight loss. Herbalife made it big on weight loss and continues to grow because of it. Many new companies have jumped on the bandwagon and are experiencing rapid growth. So, the question is, will weight loss continue to be a hot market? Taking a look at our fast paced, fast food lifestyle, I don't see that changing anytime in the near future, so yes, weight loss will remain hot. Plus, what a great opportunity to transform a person's life.
The key is to find a company that markets a complete system - products that help stimulate the metabolism and an eating program that is realistic enough for someone to do for the rest of their life. If it's a shake in the morning, a shake at noon, and a sensible meal at night, it's not sustainable long-term. If it's pre-packaged foods, it's not sustainable long-term. If people are hungry or feeling deprived on the program, it's not sustainable long-term. Find the system that people can do for the rest of their life, and you've got a goldmine!