Business Models Drive The Behavior In Network Marketing

When are the cards stacked against you?

In network marketing your business depends on marketing and in your company it’s business model drives the behavior in the field. One thing you need to ask yourself from a prospects point of view is simply this, “Would you buy the product, if there was no business opportunity attached to it?” Would you put the money out to pay for this product?

All legal network marketing companies have awesome products, companies with huge overhead all have long policy and procedures written by lawyers, because the company might steal your paycheck to cover their overhead. That is why I say business models drive the behavior. When the overhead gets too high the company with this type of business model will always change the pay plan to benefit the company so they can pay their overhead. Leaving your business and your pay check a forgotten subject, as in you lose everything you’ve built. This overhead problem is experienced by most publicly traded companies.

Companies with business models not publicly traded, with little to no overhead are able to pay the money saved directly to their distributors and therefore distributors are rewarded and retention rates are very high. Again an example of how business models drive the behavior in network marketing. A brilliant business model is a company that has the least amount of employees and buildings therefore cutting their overhead immensely. They use technology and automated programs to do the work they would have otherwise staffed positions and people to do the work, creating overhead of paying and housing these employees.

Having a company that is so streamlined they can pay their distributors more increasing their retention rates and retail product sales again the business model is driving the behavior, is the best company to find. A company that has the business model of recruit and recruit, and your income is based on recruiting, is a business model that is doomed. What happens to your check when you stop recruiting? Your check get’s smaller or it stops altogether. This is how high overhead business models drive this kind of behavior. You will never build large residual income from this business model.