If you are new to network marketing, here are 3 points to beware of as you examine the costs of participating in any particular business model.

Point 1: What is the initial investment?

Now be mindful here. Many opportunities charge a one time fee to become activated as a distributor. For example, a $49.95 activation fee is quite common.

However, to position yourself favorably within the compensation plan and actually begin earning, you typically have to purchase one of more products and/or generate qualifying sales.

It is always to your advantage to position yourself as favorably as possible in the compensation plan … BUT if you are new, do not blow your brains out with a high cost opportunity.

There are opportunities … I used to market one … that require you to invest as much as $25,000 or more to position at each of the product levels.

Because of the earning potential, this can be very tempting, but if you are new to the industry — unless you really believe you are going to be the million-to-one shot — this is not a good idea.

In my opinion, there is too much financial risk for the inexperienced marketer. The failure rate is simply too high and you will run out of cash before you master the learning curve.

Again, this is my opinion based on watching what happened within our business over nearly 5 years.

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If you are going to build a meaningful business, you are going to have ongoing costs, However, it’s best in the beginning that these costs be kept low and discretionary — in other words, you determine what you are able to spend on your marketing.

Many companies require an ongoing auto-ship volume on a monthly basis. Often, this is a minimum business volume required to keep you qualified to earn sales commissions.

Other times there are what I refer to as “disguised auto-ship” requirements whereby you must subscribe for company sponsored sales tools. For example a monthly website fee or a conference calling and training bridge subscription. Often these can add monthly expenses of $100 or more.

As a newbie, avoid these. They are unnecessary and put additional cashflow strain upon you while you are learning to master the basics of building your business.

Point 3: Are there monthly minimum volume requirements?

Some programs have minimum sales volume requirements to qualify for commissions or to remain qualified at the most favorable level.

There is nothing wrong with incentive based compensation in and of itself, but be wary of where the program design compels you to take on personal auto-ship or recurring orders simply to ensure you meet the minimum monthly sales quota requirements.

Remember, as a new or inexperienced network marketer, you want to beware of these 3 things and focus on learning and mastering your craft with an affordable opportunity that keeps you incented to build, but minimizes the financial risk you undertake while you are learning.

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Original Post can be found here: 3 Points to Beware Of For The New Or Inexperienced Network Marketer