You are interested in starting your own network marketing home based business. How do you evaluate all the possible opportunities out there? First, it is important to understand how success is achieved with any home business opportunity. Certainly, complete financial independence is possible with your own home-based network marketing business, but it takes time to build it to that point. Some will achieve this independence in as little as 3-5 years. Others will take longer. Your network marketing business should be stable and continue to be an excellent opportunity for those who join in the years ahead. Please ignore the hype about "ground floor" opportunities. Startup companies are very risky to join. It is much wiser to select a proven business opportunity that has a solid track record.



There are three important factors to consider when evaluating a home-based network marketing business - the product line, the company, and the compensation plan - in that order. If you aren't personally sold on the products, the rest doesn't matter. And if you like the products, but the company is in trouble, then the marketing plan means little.

The Products

The product line is, by far, the most important aspect of any home business opportunity. If the products are not good, and reasonably priced, who will want to buy them? Are the products high in quality and is the price competitive with similar products on the market? If you were not earning anything from your downline group sales, would you still purchase the company's products at the retail price? If not, then look elsewhere.

Are the products consumable? If not, you will have to constantly work to find more and more customers. If they are consumable, you can continue to sell the products month after month to a loyal customer base. You will also want to consider what the true market for the product line is. If the products are very high quality with an associated high price, how big is the market for this level of quality? The same goes for unique, one-of-a-kind products. How many people will actually buy the product?

The Company

Once you are comfortable with the product line, the next step is to take a closer look at the company, its management, and their philosophy. As with startup businesses in general, the failure rate for new network marketing companies is very high. A high percentage of new start-up companies don't make it past 18 months. They may be severely underfinanced or have poor management that can't handle the sporadic growth of a new opportunity. If you have committed to a new company and they fail after 18 months, that means that you have wasted all of your effort and commitment, and must start over again with another company.

Find out how long the company has been in business. If it is less than 3 years old, it is risky to join. Talk to associates of the company and ask questions. Are bonus checks being sent out on time and is product being delivered in an efficient manner? Although you are an independent associate, you are still at the mercy of the company when it comes to getting products and getting paid.

The Compensation Plan

Next, consider the compensation plan. Many plans differ on the monthly requirements to stay "active". There should preferably be no monthly requirements to remain active because if the products are good, then the representatives should want to buy them for themselves without being forced to. Nearly all network marketing companies today do not require you to stock products or pay out bonuses to your downline group. You and all of your downline should be able to buy directly from the company and the company should pay all bonuses and commissions directly to the associates.

In comparing retail commissions and bonuses, you must keep a few things in mind. First, some companies quote their retail percentages as a mark up, while others use a discount percentage or commission. A 50% mark up is equivalent to a 33% discount. Second, many companies pay out based on a bonus or point value (BV or PV) while others pay out on the retail price. If a bottle of shampoo sells for $10 and has a BV of $8, a 10% bonus would be 80 cents. Another company may pay out only 8%, but on the full retail amount, so in this case, 8% of the same $10 is still 80 cents. You want to make sure compensation plan payout comparisons are fair.

Some network marketing compensation plans seem designed to make a few associates rich, while the average associate makes little or nothing. Some are designed to allow the average associate to earn a decent income, while making it difficult to build the really large incomes. The best plans provide a balance between these two. After all, for anyone to get wealthy in network marketing, it will take a lot of part-timers in their group to get there. It's important that the new and part-time people can make some money too.

Summary

If you are personally sold on the products, feel comfortable with the stability of the company and management, and find that the compensation plan is fair, then you probably have the right fit for you. My suggestion is to try some of the products, and then present the catalog or product brochure to a couple dozen friends and acquaintances and see what they think about the products and opportunity. This will give you a good idea of what you will encounter as you start your business. Doing this kind of work and thoughtful consideration prior to getting involved should lead to a long and successful career in network marketing!