This is one of those topics that cause 85 percent of the population — especially business owners — to cringe and run away. I believe it’s one we all need to understand before dismissing without consideration. Another term commonly used for Network Marketing is Direct Sales.

There are many products and services that have been successful using this approach. While most of them fall dead after a time because they have a product or service that can be replicated and eventually sold in more traditional ways at a lower cost, a few of them are the “real deal.” This tends to create the perception that the early adopters get wealthy while most of those who adopt it later never really recover their cost to get into the business. This often leaves a bad impression and an aversion to hearing about anything else marketed this way.

For those of you who don’t know what Network Marketing is, here’s a quick definition: “A business opportunity that provides a unique product or service that cannot be purchased any other way than through a representative who sells it directly to a person or business.”

In order for a person to be successful in this opportunity he/she must recruit three or more people to do the same thing and then manage those three or more to replicate their business the same way. As they build this business model the “up-line” sponsors get bonuses on sales made buy their “down-line” — as long as the up-line sponsor keeps selling his/her quota.

Some names you may know are Amway, Avon, Mary Kay Cosmetics, Pre-paid Legal Services, USANA, Herbalife and many others. The problem with almost all of these is the product or service can be replicated by other companies so that only the first few thousand who get involved make any substantial money. The only companies that can survive the long term must have the following criteria:

• A patented — non-duplicable product or service.
• A product or service you want to use yourself for the rest of your life, and one you want to share with everyone you care about because it will make his/her life better.
• Systems that give you step-by-step actions that are proven to bring results.
• Managers who don’t simply recruit you, but rather actually partner with you to hold your hand through the business building process.
• Automated computer systems that include third party marketing tools proven to work over time. Remember my articles on the Hopper System?
• Have a company philosophy that is about “making lives better” rather than making money.

Do your research carefully, and if you find one that fits these criteria it’s worth taking a serious look before you dismiss it based on the fears of what you have heard or experienced in the past. It may well be a match for you to grow into something to help you retire more quickly.

Reprinted from Napa Register, Sept 28, 2014.