Ever heard of Network Marketing? Well, this is not a new phrase to most of you. You may have heard about it from either a friend, family member or social media. Multi-level marketing, also known as network marketing or referral marketing, is a form of strategy used by companies to sell goods and services directly to the consumer through some kind of referrals.

Network MarketingThe referral system works in such a way that when you join a MLM (multi-level marketing) company for instance, you are required to introduce the goods and services they offer to people you may know. Network marketing majorly focuses on human to human interactions.

In most cases, the sales representative tries to recruit other people into the system and any income generated will benefit more the person at the top of the ‘recruit chain’. However, most people are sceptical about network marketing considering the downfalls encountered by most companies.

In this article, the essence is to discuss what network marketing is exactly, the major mistakes made by new marketers and how to avoid them as well as how to differentiate a legit network marketing platform from a pyramid scheme.

What is network marketing?

People have very diverse insights when it comes to Network marketing. Some have total confidence in this business while others believe it’s just a pyramid scheme. Basically, Network marketing is a well-structured business model that commits its overall success to the distribution chain.

The sales representatives usually buy the product directly from the company and sell or earn through commissions not only from their own sales but also from the other people they recruit (The downlines). The internet is the major key in this generation to making the products and services known to as many people as possible. Websites as well as social media platforms have played major role in creating a wide scope of members.

Although banned in most countries, network marketing is a business just like any other. It therefore needs the same seriousness and attention as other businesses when it comes to management and the appropriate marketing strategies.


It’s quite common that the drive for money clouds newest marketer’s judgement when it comes to laying out the strategies of being a successful sales representative. Here are the common mistakes they are prone to making and the possible ways to avoid them.

Mistakes new network marketers are prone to do and how to avoid them

  1. ‘Big Money’ rush

If you’ve encountered network marketers, you can bet that they are so good at convincing people how easy you can earn money by recruiting friends. If financial freedom wasn’t the major reason why people join network marketing, this kind of business wouldn’t have been invented in the first place. Many are those that expect to get easy money in a short span of time. They see their potential recruits as money rather than future team members.

What they don’t understand is that, in network marketing an individual’s success depends on one helping others succeed first. They forgo analysing the business and how fit it is for them and focus solely on the potential income.

  1. Fabricating your own antagonists

Don’t you think it’s just insane how the network marketing companies work? They will require the sales representatives to train their downlines how to recruit new members and sell the same similar products as them. What the sales reps forget is that they are simply creating their own competitors. The trainees will be good at what you do too therefore reducing your own sales. Up lines are very convincing and more often will lure you with the ‘passive income’ thing forgetting that this will only benefit the company and not you.

  1. Lack of passion

The downfall of your career sets in as soon as you wake up to those ‘I hate this job’ laments. As a network marketer, it is necessary to love what you do. Motivate yourself and always remember your goals. Most people do not care at all about the products therefore making it a rough road engaging with the consumers.

It’s actually best if you love the products you are selling. This is especially if you have first-hand experience about them. You are supposed to be out there sharing your personal experience.

  1. High Expectancy Rate

Where most people mess up in network marketing is the lack of a well laid out prospect list. People are too quick to join the business that they forget to analyse a list of people who might be interested in this particular business idea. They end up wasting a lot of time and resources focusing on family or friends who, might not even join whichever business you introduce to them up and until they see your own success.

This particular list of prospects should be updated now and then as you contact each of them and introduce your business. It’s also necessary to understand that not everyone is a prospect team member to avoid discouragements.

  1. Ignoring instructions

If there is something people are good at is ignoring to read instructions as well as the terms and conditions of a particular paper work. I Just don’t get it! The person who recruits you may highlight a lot of things but not all. It’s always up to you to read the finer details.

For instance, its common to find people reporting companies with authorship that they are a Ponzi scheme. In most cases, the company has it all laid out in their terms and conditions section on how to terminate contracts and return products if you are no longer interested. Just read it to be on the safe side.

  1. Poor Sales Pitch

Most network marketers easily forget that what they do is different from what the salesman does. The salesman makes sales, earns his commission and moves to the next sale leaving the company’s customer care service to worry about adjacent problems. On the other hand, network marketers are required to engage their consumers and duplicate their sales strategy in their recruits rather than just recruiting and signing up new members.

  1. Discouragement

Humans unlike machines get tired of trying. The most common answer when introducing the business ideas to prospects is ‘No’. You may want to give up on this very fast but you should not despair. It is necessary to follow up those who said that they might be interested to try later. Sometimes the ‘no’ might actually mean not at that very moment but maybe later. Try your luck and get back to your buyer later.

Pros of network marketing:

Advantages of Network marketingThere are many advantages/pros of Network marketing. Below are some of the advantages of network marketing.

1.Manageable risk involved

Each of the marketers are responsible for their own sales and this makes the company reduce its risks. With only a few bucks, you can actually start a good network marketing forum and start recruiting your representatives. Reduced risks mean that the company has a high probability of surviving ‘low’ seasons.


Without a doubt there is a growing demand each and every day for quality goods. Network marketing companies usually have first-hand interactions with the buyers and their success majorly focuses on one to one contact, making it the most influential business. Therefore, if you can offer quality goods and services, network marketing might actually be the thing for you.


Technology has taken us to a whole new level. In this generation, the invention of internet, computers and telephones has made it possible to work remotely. Communication is essential in marketing. The fact that network marketing has several representatives makes communication with the consumers an easy task since they can deal with their clients directly.

4.No employees

One of the biggest problems most companies have is employees and paying them. Network marketers are usually considered as partners hence there are no employees. This makes everyone work independently once they are recruited. Network marketing representatives each have the chance to work in unison with a common goal and no one is an employee of the other because everyone earns from his or her own sweat (sales).

5.There is no need for supervision

Most network marketing companies usually work with limited supervisions. Once the sale representative has undergone training, they are left to make their sales and are only supervised when they return the profits. This is the best working environment for most people due to the fact that you don’t have anyone on your back to keep pressuring you.


However, with all these advantages you will still get some network marketing companies going down. What do they do wrong?

Reasons why most network marketing companies fail:

It is easy to join a network marketing company compared to other business ventures. Why? This is due to the fact that you require very little funding to join luring almost all of us into it. Most entrepreneurs don’t care even if the business goes down because they didn’t invest so much in the first place. The greatest strength of network marketing proves to be one of its greatest weakness too. Here’s an insight to some of the reasons network marketing companies fail;

  1. Capital

Capital is the core to any business venture and network marketing is no exception. This company has the capability to grow in a matter of days from a thousand sales representatives to over a million in less than a month. You will be required to have the ability to finance the extreme growth and any other legal issues that may arise. The lack of capital to finance the growth rate will doom the company faster than you can imagine.