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What is the best network marketing company? Is there one that stands above all the rest? What should you know before choosing a network marketing company?
If an MLM is new, how can you tell if you're being scammed or if it will be a successful company? What should you look for? Learn from my many years of experience.
The best network marketing company starts with great leadership. Who makes up the executive team? If there is no "team" there usually is not much of a Company because no one can do it all themselves. Whereas it is important that the Company be well funded (most require financial backers), sometimes being too well funded means the owner(s) are very rich and if the Company fails, he can fall back on his riches. What about all the distributors, what can they fall back on?
Leadership involves a lot more than money. In fact, money can cause someone to think too much of himself and what he says goes, always. Also, the money is there but the experience isn't. It may be business experience, but not network marketing business experience. And is the executive team made up of people who never worked together or knew each other before this joint venture? They better get along or there will be problems.
In other words, there are lots of reasons an executive team could fall apart or have a parting of the ways. And even when they do get along and are doing well as a business, what is to prevent one member from leaving the Company for a "better offer"? This loss could affect the membership greatly. Having executives as part owners usually keeps them on board.
Perhaps the biggest problem in leadership for a network marketing company is the final decision maker and his/her view of wealth and income. Too often a company seems to be doing fine when suddenly there's a change in the pay structure or compensation plan. More money is shifted (through breakage) to the Company to the loss of its members. Try to discern the owners interests and reasons for doing this company.
So find out all you can about the executive leaders in the Network Marketing Company you're considering. If you can't find much about them, find someone who knows them, perhaps personally and can vouch for their integrity. What kind of experience do they have, as distributors, leaders and executives? Their actions will speak louder than words so watch for good decisions, flexibility and a willingness to listen to the field. If there are RED FLAGS, don't ignore them.
It also helps if the executive team are all part owners of the Company. This way they are less inclined to leave and have more incentive to make it work. There's no guarantees that a new network marketing company will succeed, but that's true of any business. Just be sure to choose one that won't crumble if times get a little tough. They will.
Perhaps a major consideration when choosing a network marketing Company is their Compensation Plan. What should you look for in a network marketing comp plan? You want to see that it favors the small guy as well as the big hitter. After all, the leaders might make up the foundation, but the average distributors make up the bricks that make it tall.
Most network marketing comp plans are confusing and difficult to explain at best. How much breakage is there? What qualifies you to earn commissions? Are there fast start and matching bonuses? How many levels deep does it go and how wide can you build? How much does it pay out on average?
Most network marketing companies pay out about 36 to 39% of their income. In some plans, like binaries, you may have a lot of volume in one leg and you only earn on that volume when you balanced the other leg with just as much volume. Well guess what? Most people don't know how to do that and the company either keeps that volume or in some cases flushes it away at the end of the month. Don't run from Binaries, learn how to work them.
Many network marketing companies use binaries or matrices. In a matrix, you are often shown how you could earn $15 to $20K with a full matrix, which in a 3 X 8 for example, there would be over 16K people. Some companies only end up with 40 to 50K people in them, so chances of them all being under you isn't likely. The main thing to consider is whether or not you understand it.
If you don't understand a Comp Plan you'll probably not know how difficult it is to earn from it. On the other hand, if it's simple you can clearly see what you need to do to earn.
The latest kind of comp plan being used is called a straight line comp plan. The slogan, everyone who joins after you is under you sounds appealing, but it's how you benefit that matters. Don't be afraid to ask a potential sponsor how a comp plan works, how much money you can possibly make from it or what its outstanding features are. Some so called straight line comp plans are really just glorified unilevels.
How do you know if a new network marketing company is a scam or a money grab ( where just the first small group of leaders make money and you don't? ) Here are reasons you should NOT join a network marketing company:
There is no owners name, address or contact information. There is just one owner and he does not have any executive team. The owner or owners have some red flags already associated with their name on the Internet where others can easily find it. No one seems to know the owners or in some cases, that he or they are out of the country.
The website is the typical boats, planes and big houses with cash flying in the air. The website looks cheap and has very little information. The product isn't a product at all, but rather something downloadable.
The products are software or downloads or "how to" information and rarely have any value or usefulness. Some offer marketing tools that can be quite useful but these type of companies never seem to last and the tools are not necessarily something everyone can use.
Companies that do well in network marketing have a unique or first to market product or a product that really works that no one else has. The company is well branded. Their appearance on the Internet is like a Fortune 500 Company.
They have an outstanding Compensation Plan that appeals to network marketing leaders and they have a well financed and experienced executive team.
There is also a "buzz' about them and they get and maintain a momentum because of word of mouth and marketing. They don't come along too often but when they do, they're very hot. Some examples are below.
So what might be the best network marketing company for this year? Is it one of the billion dollar companies listed on the right?
Is it a brand new start up company that just pre-launched?
Wouldn't it be the company that you get excited about and make an income from? I think so! To see what I am most excited about and making an income from go to here. Is it the best network marketing company? That's for you to decide.
Here are the the companies that comprise the Direct Selling Industry’sexclusive billion-dollar club. They are Network Marketing Billion Dollar Companies.
1. Avon Products Inc. $10.9 Billion
Topping the billion-dollar club list is, of course, New York City-based public company Avon (AVP—NYSE), the industry’s mother ship. As the world’s largest direct seller, Avon markets to women in more than 100 countries through 5.5 million independent sales representatives.Judging by Avon’s latest financial figures and its third-quarter earnings statement, the company is in a growth cycle.In 2007, Avon’s revenue was $9.9 billion. Over the last four quarters—Q4 2007 through Q3 2008—Avon’s revenue was $10.9 billion. Additionally, third-quarter 2008 revenue grew to $2.6 billion, a 13 percent increase over Q3 2007.“Avon’s third-quarter performance reflects continued momentum of our turnaround plan,” Andrea Jung, Avon Chairman and CEO, said in a press release. “Our investments in advertising and the Representative Value Proposition (RVP) are yielding strong results.”Avon was ranked No. 265 on the 2008 Fortune 500 list.Name of Company: Avon Products Inc. Type of Company: Public (AVP—NYSE) Number of Employees: 42,000 Number of Markets: More than 100 Revenue: $10.9 billion in revenue for last four quarters (Q4 2007 – Q3 2008); $9.9 billion in revenue for 2007 Jul – Sep 2008 (Q3 2008): $2.6 billion in revenue Apr – Jun 2008 (Q2 2008): $2.7 billion in revenue Jan – Mar 2008 (Q1 2008): $2.5 billion in revenue Oct – Dec 2007 (Q4 2007): $3.1 billion in revenue
2. Amway Corporation $8.2 Billion
In the No. 2 spot is direct selling giant Amway. Its annual sales for 2007 were $7.16 billion, and for 2008 were $8.2 billion. Amway Chairman Steve Van Andel says the company continues to remain optimistic about its future growth potential, despite a bleak economic outlook in some of its markets. “Amway’s rapid expansion around the world and the acceptance of the direct selling business model by countries such as Russia, India, Ukraine and others, has blunted the impact of the economic downturn on our company,” he says.In late 2007, Amway completed its production and warehousing facility in Vietnam. Since then, Amway Vietnam Co. Ltd. has become one of the company’s fastest-growing markets. “Officially launched in February 2008, Amway Vietnam now has more than 40,000 independent business owners throughout the country,” Van Andel says.In 2009, Amway plans to increase its efforts in more established markets such as the United States and Great Britain—“to revive our former buoyancy,” Van Andel says.“We’re expecting big things to happen in 2009, such as continuing to increase our visibility through advertising, sponsorships and a growing physical presence around the world,” he says.Name of Company: Amway Corporation Type of Company: Private Number of Employees: 13,000 Number of Markets: More than 80 Sales: $7.16 billion annual sales in 2007; $8.2 billion annual sales in 2008
3. Vorwerk & Co. KG $3.15 Billion
Founded in 1883 as a carpet company, Wuppertal, German-based private firm Vorwerk & Co. KG has been selling quality products—from household appliances to cosmetics—through the direct sales channel since 1930. For 2007, Vorwerk reported a sales volume of $3.15 billion (€2.32 billion). Vorwerk is the parent company of JAFRA Cosmetics, which had a sales volume of $469.71 million (€342 million) in 2007.Regarding the current monetary malaise affecting countries worldwide, “Vorwerk’s managing partners decided not to participate in the global economic crisis,” says Vorwerk Senior Vice President of Corporate Communications Jürgen Hardt. “In truth, the European—and especially German—economy is better prepared for global turbulences than other parts of the world.”While Hardt says Vorwerk’s growth has been significant in the past 10 years, he admits the firm must be careful to balance potentially negative influences. “The company will not be totally free of the negative impact of the crisis,” he says.But to a certain extent, Vorwerk is protected from financial turbulence. “As a financially viable, family-owned company, we are not dependent on banks,” Hardt says.Hardt says, as others have, that more people may be willing to join Vorwerk—and other direct selling companies, too—during tough financial times. “Availability of salespeople is one of the most important factors for success in direct sales,” he says. “Our growth expectations are unlimited.”Name of Company: Vorwerk & Co. KG Type of Company: Private – parent company of JAFRA Cosmetics Number of Employees: 23,000 Number of Markets: 61 Sales Volume: €2.32 billion ($3.15 billion) in sales volume for 2007
4. Herbalife Ltd. $2.4 Billion
Los Angeles-based public company Herbalife (HFL—NYSE) sells its products through more than 1.9 million independent distributors who conduct business worldwide. In 2007, Herbalife’s net sales were $2.14 billion. Over the last four quarters—Q4 2007 through Q3 2008—the company’s net sales were $2.4 billion.“While our business isn’t countercyclical to the economy, as of Q3 2008, it seems to be resilient to the economy,” says Des Walsh, Herbalife Executive Vice President, Worldwide Operations and Sales. “Eighty percent of our business is outside the United States, so we’re constantly operating in various economies. Naturally, in a tough economic climate, our business opportunity is even more attractive to someone who loses his job or is in need of supplemental income.”Walsh says Herbalife has made substantial investments in markets outside the United States. In 2008, Herbalife opened four new markets: Honduras, Guatemala, Nicaragua and Ecuador.Herbalife has also invested more than $50 million in upgraded Oracle applications, so it has the IT infrastructure necessary to support significant future growth.“We’re currently doing business in 70 countries, but there are several markets we are planning to open in 2009,” Walsh says. “Also, we’re focused on more deeply penetrating our existing markets and globalizing best practices.”Name of Company: Herbalife Ltd. Type of Company: Public (HFL—NYSE) Number of Employees: 3,644 Number of Markets: 70 Net Sales: $2.4 billion in net sales for last four quarters (Q4 2007 – Q3 2008); $2.14 billion in net sales for 2007 Jul – Sep 2008 (Q3 2008): $602.2 million net sales Apr – Jun 2008 (Q2 2008): $639.7 million net sales Jan – Mar 2008 (Q1 2008): $604.4 million net sales Oct – Dec 2007 (Q4 2007): $578.1 million net sales
5. Mary Kay Inc. $2.4 Billion
Addison, Texas-based private company Mary Kay Inc. was founded in 1963 by Mary Kay Ash with her life savings of $5,000. From its humble beginnings in a 500-square-foot Dallas storefront, Mary Kay Inc. has grown into one of the largest direct sellers of skin care and color cosmetics in the world, with a global independent salesforce exceeding 1.8 million.Since the firm’s founding, Mary Kay Inc. has averaged double-digit growth each year. In 2007, the firm generated $2.4 billion in wholesale sales. Mary Kay opened its first international market—Australia—in 1971, and its most recent—India—in 2007. Among its more than 35 active markets, Mary Kay’s three top international markets are China, Russia and Mexico.In 2009, Mary Kay Inc. plans to invest time and money in its corporate social responsibility initiative, Pink Changing LivesSM. Mary Kay Inc.’s financial and product donations spotlight changing the lives of women and children around the world, with a focus on the prevention of violence against women. Additionally, Mary Kay Inc. will plant 100,000 trees in North America and embark on a groundbreaking initiative to turn waste from its manufacturing process into usable energy.Name of Company: Mary Kay Inc. Type of Company: Private, family-owned Number of Employees: 5,000 Number of Markets: More than 35 Sales: $2.4 billion in wholesale sales for 2007
6. Primerica Financial Services Inc. $2.3 Billion
Based in Duluth, Ga., private firm Primerica Financial Services—a subsidiary of public parent company Citi (C—NYSE)—boasts the largest salesforce in the financial services industry. There are approximately 100,000 licensed, independent Primerica representatives across the United States (including Puerto Rico), Canada and Spain.For Primerica, the current credit crunch is a blessing in disguise, or maybe just a blessing. Primerica Co-CEO John Addison is known for saying, “There might be a recession in America, but there’s no recession at Primerica.”The numbers bear him out. “Through the first three quarters of last year, of the top 100 largest life insurance companies in the United States, 89 had a net decrease in their capital base,” Addison says. “Only 11 had an increase in their capital base, and the third largest capital base increase out of all the life insurance industry was Primerica Life at $120 million.”At a time when layoffs and cutbacks are the rule not the exception, especially in the financial services industry, Primerica is investing in its future. “We’ve implemented a new bonus that’s very much aimed at licensing and building new people,” Addison says. “We’re making significant investments in our technology platform to make the recordkeeping for our independent contractors simpler.”Addison expects these investments to pay dividends in the near-term—and even in the midst of a recession. “Our model of building distribution weathers the storms that are going on in the world incredibly well,” he says. “Our goal is a 20 percent increase in recruiting, a 20 percent increase in licensing. While everybody else is focused on doing damage control, we’re going to go do some damage.”Name of Company: Primerica Financial Services Inc. Type of Company: Private, subsidiary; Parent company, Citi (C—NYSE) Number of Employees: 2,000 Number of Markets: Three Revenue: $2.3 billion in revenue in 2007
7. Tupperware Brands Corporation $2.21Billion
Publicly traded Tupperware Brands Corporation (TUP—NYSE), based in Orlando, Fla., sells storage and serving products through Tupperware, and beauty and personal care products through Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo and Swissgarde.In 2007, Tupperware’s sales were $1.98 billion. In the last four quarters—Q4 2007 through Q3 2008—the company’s sales were $2.21 billion. “Our emerging markets accounted for 56 percent of our third-quarter sales, and the bulk of these businesses continued to perform extremely well,” says Chairman and CEO Rick Goings in Tupperware’s Q3 earnings release. “We believe we will generate modest local currency growth from established markets in 2009 and forward, as we’ve seen the payoff in selected markets of the work we’ve done over the last several years to revitalize these businesses.Tupperware is listed as No. 903 on the 2008 Fortune 1,000 list.Name of Company: Tupperware Brands Corporation Type of Company: Public (TUP—NYSE) Number of Employees: 12,800 Number of Markets: 100 Sales: $2.21 billion in sales for last four quarters (Q4 2007 – Q3 2008); $1.98 billion in sales for 2007 Jul – Sep 2008 (Q3 2008): $513 million in sales Apr – Jun 2008 (Q2 2008): $584 million in sales Jan – Mar 2008 (Q1 2008): $543 million in sales Oct – Dec 2007 (Q4 2007): $577 million in sales
8. Forever Living Products International Inc. $2.1 Billion
Private firm Forever Living Products, based in Scottsdale, Ariz., sells aloe vera drinks and aloe vera-based aromatherapy products, cosmetics, dietary and nutritional supplements, lotion, soap and tooth gel products in some 135 markets. Annual sales for 2007 were $2.1 billion. According to Rex Maughan, Forever Living CEO and Chairman of the Board, “2008 has been a remarkable year for Forever Living. “In spite of the global turmoil, I am grateful for the fact that Forever Living is going strong,” Maughan says. “Although I have not seen all the figures yet, I am confident that 2008 will be a great year. Although no business is recession-proof, there is always opportunity in every business climate.“When times are tough, people often look for ways to earn more money or even find an alternate source of income in case their ‘main’ job is threatened.”Name of Company: Forever Living Products International Inc. Type of Company: Private Number of Markets: 135 Annual Sales: $2.1 billion in sales for 2007
9. Oriflame Cosmetics $1.68 Billion
Swedish company Oriflame offers high-quality skin care, fragrances, color cosmetics, toiletries and accessories. Oriflame has grown rapidly, recently opening two markets—Iran and China.“We have increased sales by more than 17 percent per year on average for the last 20 years,” says Magnus Brännström, Oriflame’s CEO. “This is clearly above-market growth. We intend to continue to grow more than the cosmetics market in the future. We believe we will take market share in 2009.”Name of Company: Oriflame Cosmetics Type of Company: Public (ORI—SDB.ST) Number of Employees: 7,000 Number of Markets: 61 Sales: $1.68 billion in sales for 2007
10. Natura Cosmeticos SA $1.52 Billion
São Paulo, Brazil-based firm Natura Cosmeticos SA is traded on the São Paulo Stock Exchange (NATU3). Natura operates in the Chile, Peru, Argentina, Mexico, Colombia and Venezuela. It manufactures deodorants, sunscreens, lotions, creams, lipsticks and perfumes. Over the last four quarters—Q4 2007 through Q3 2008—Natura’s revenue was $1.52 billion.Natura’s Q3 earnings statement says: “The globalized world’s main economies are currently undergoing a period of significant change. Developing countries, however, may be less affected by the crisis, and could thus play an important role in the growth of the global economy. Our company is highly profitable, has strong cash generation and a treasury that operates safely and selectively.”Natura is focusing on international expansion, but the firm is choosing its markets with care. “Studies for the implementation of a United States operation have shown that the moment is not suitable,” reads the Q3 earnings report. “We have decided to suspend our entry into that market for an indeterminate period. We will maintain our operation in France as part of a group of initiatives to build our global brand and as a source of learning about demand in a highly sophisticated market.”Name of Company: Natura Cosmeticos SA Type of Company: Public – São Paulo Stock Exchange (NATU3) Number of Employees: 5,919 Number of Markets: Seven Net Revenue: $1.52 billion in net revenue for last four quarters (Q4 2007 – Q3 2008) Jul – Sep 2008 (Q3 2008): Net revenue R$921.1 million = $412.21 million Apr – Jun 2008 (Q2 2008): Net revenue R$883.1 million = $395.21 million Jan – Mar 2008 (Q1 2008): Net revenue R$668 million = $298.66 million Oct – Dec 2007 (Q4 2007): Net revenue R$937.8 million = $419.29 million
11. Nu Skin Enterprises Inc. $1.23 Billion
Provo, Utah-based publicly traded company Nu Skin Enterprises Inc. (NUS—NYSE) markets personal care products under the Nu Skin® brand; science-based nutritional supplements under the Pharmanex® brand; and technology-based products and services under the Big Planet® brand. Over the last four quarters—Q4 2007 through Q3 2008—Nu Skin Enterprises’ revenue was $1.23 billion. In 2007, the firm’s revenue was $1.15 billion.Ritch Wood, Nu Skin Enterprises Chief Financial Officer, says although there are repercussions for every company because of the current economic situation, he believes Nu Skin Enterprises is in a position to weather the storm due to its sales momentum, innovative products and strong balance sheet.“In 2008, we experienced double-digit growth in many of our markets around the world, and we look for this momentum to continue in 2009,” Wood says. “We are looking forward to a great 2009.”Nu Skin Enterprises opened two new markets—South Africa and the Czech Republic—in 2008, bringing the company’s market total to 48. “We have already seen great excitement in these two markets,” Wood says. “As of December 2008, South Africa has welcomed 2,100 distributors. We look forward to continued growth from both of these markets in 2009.”Finally, Nu Skin reminds us that sharing success is the key to attracting more success.“Nu Skin and its distributors continue to generate success—and in the process, continue to be a force for good by giving back to those in need,” Wood says. “As dollars for charitable giving shrink, the Nu Skin Force for Good Foundation continues to grant more than $1 million each year to help nourish the minds and bodies of children.”Name of Company: Nu Skin Enterprises Inc. Type of Company: Public (NUS—NYSE) Number of Employees: 1,200 Number of Markets: 48 Revenue: $1.23 billion in revenue for last four quarters (Q4 2007 – Q3 2008); $1.15 billion in revenue for 2007. Jul – Sep 2008 (Q3 2008): $310.27 million in revenue Apr – Jun 2008 (Q2 2008): $321.7 million in revenue Jan – Mar 2008 (Q1 2008): $298.1 million in revenue Oct – Dec 2007 (Q4 2007): $306.1 million in revenue