MYTH #1: 99% of those who get into network marketing not only don’t make money, they lose money; and only those who get in early make the big money.
FACT: More than half of network marketers report that their net income from this industry, after taxes and expenses, is positive. In addition, a positive net income is reported by nearly half of people newly involved in network marketing — those representing their current company for less than a year — and by nearly half of network marketers who say that they are not very likely or not at all likely to continue in network marketing in the future. In addition, research shows the following:
- four in five (82%) network marketers have been with their current company for one year or more, and 47% for five years or more.
- 89% of network marketers rate their personal experience in direct selling as excellent, very good, or good.
- 84% of network marketers say that direct selling meets or exceeds their expectations as a good way to supplement their income or as a way to make a little extra money for themselves.
- 91% of network marketers say that direct selling meets or exceeds their expectations as a business where the harder they work the more money they can make.
(Source: 2002 National Salesforce Survey, Research International, Inc.)
This myth is also quite interesting because it essentially asserts that 15.2 million people in the US and 60 million people around the world continue in network marketing despite losing money. Are we to believe the 5% of the US population would continue in a business where they are losing money? Simply put, most people do not lose money with network marketing. Neither the facts nor common sense supports that theory. Further, anyone who gets involved with a legitimate network marketing company should not risk financial loss by doing so. The Direct Selling Association’s Code of Ethics, for example, is designed to protect those who get involved with network marketing and their customers. Inventory buybacks (which include sales aids) and other provisions allow people recourse if there’s an issue with the company – no one should lose money in network marketing, nor should anyone feel like a failure if it doesn’t work out for them.
With our network marketing company it makes absolutely no difference when you join as to how much money you can make. Many people who are making huge incomes have joined within the last few years, as opposed to those who joined a decade earlier. You can actually make more money than those who sponsored you into the business. With our company your income depends upon you; …how much you want to work, how committed you are to becoming successful, and ultimately how persistent you are.
MYTH #2: Most network marketing companies are pyramid schemes that are doomed to fail.
FACT: There’s a big difference between legitimate network marketing companies and pyramid schemes. Pyramid schemes seek to make money from you (and quickly), often without moving products or providing a service. Legitimate network marketing companies seek to make money with you as you build your business (and theirs) by selling real products and services. In fact, legitimate direct selling companies work hard to protect consumers from pyramid schemes. Before you sign up with a company, investigate carefully. A good way to begin is to ask yourself these three questions:
1) How much are you required to pay to become an independent distributor (associate)? If the startup cost is substantial ($3000 or more), be careful! The start-up costs in network marketing companies should generally be low and cover the cost of your start-up kit (usually sold at or below company cost) which can include training materials and other items to get your business going. There may be various levels or packages by which to enter the business, and the difference should be based upon the amount of products you initially purchase, not upon a fee. These companies want to make it easy and relatively inexpensive for you to start selling. Pyramid schemes, on the other hand, make nearly all of their profit on signing up new recruits. Therefore, the cost to become a distributor is usually high.
We have various startup packages that will suit your needs, ranging from a one-time initial purchase of $350 to $1250, and anywhere in-between. Understand the differences between each startup package before enrolling. There are significant advantages by coming in with the high-end package, rather than coming in for the least amount possible.
2) Will the company buy back unsold inventory? If not, beware! Legitimate companies that require inventory purchases will usually “buy back” unsold products if you decide to quit the business. Some state laws and the DSA Code of Ethics require buy-backs for at least 90% of your original cost.
3) Are the company’s products sold to costumers (consumers)? If the answer is no (or not many), stay away! This is a key element. Network marketing, or direct selling, (like other methods of retailing) depends on selling to customers (consumers) and establishing a market. This requires quality products that are competitively priced. Pyramid schemes, on the other hand, are not concerned with sales to end users (customers) of the product. Profits are made on volume sales to new recruits, who buy the products, not because they are useful or attractively priced, but because they must buy them to participate. Certainly, with a legitimate business, you will need to purchase products, however, inventory purchases should never be more than you can realistically expect to sell or use yourself.
Our company was established in 1992, and had been steadily growing in size and sales every since. It has received many coveted awards, been recognized by third parties for numerous reasons, including for it's number-one rated quality products, number-one rated compensation plan. (Please view the movie at the bottom of this page explaining our Compensation Plan.)
MYTH #3: Recruiting is the key to success in network marketing; sales to end-users (customers) of the products and services are minimal.
FACT: There’s no doubt recruiting is an important element of network marketing – just as expansion is important to any business that wants to grow. For those in network marketing looking to build a business, recruiting others and mentoring them so they, too, can achieve their goals is important. But, recruiting is not a requirement for individual success in direct selling, and compensation must always be based on the sale of products or services – whether from your own sales or the sales made by those whom you sponsor (your recruits). Consider the following: thirty-four percent of network marketers do not earn money from the sales of others (their recruits), but from their own personal sales. (Source: 1999 National Salesforce Survey, MORPACE International, Inc.)
And what about customers? It is true that most network marketers are also consumers of the products or services they sell – for many they got involved after having already used the products; and some get involved just to buy those products at a discount. But, half (50%) of U.S. adults purchase products or services using the direct-selling retail channel during any given year. That’s roughly equivalent to 150 million people in the US alone who make at least one purchase from a direct selling company in a 12-month period. When you consider there are 15.2 million direct sellers in the US, that leaves a lot of customers who are not network marketing distributors. (Source: 2004 General Public Attitudes Toward Direct Selling, Burke, Inc.) In other words, you will build a customer base of people who want to use the company’s products.
MYTH #4: The vast majority of new recruits quickly drop out.
FACT: Nearly four in five (78%) people who are in network marketing for less than a year report that they are very or extremely likely to continue. In addition, in a survey of former direct sellers, only 34% of them had a tenure in direct selling of less than one year at the time they dropped out from direct selling. (Source: 1997 Survey of Attitudes Toward Direct Selling, Wirthlin Worldwide) Moreover, the turnover rate of those in network marketing is similar to the turnover rate of employees in the retail industry.
During 2001-2003, the average annual turnover rate of network marketers was 56%, compared to 53% for the retail industry. When considering the drop out rate, one also has to consider people who get involved in network marketing for several months each year just to earn extra money for family vacations, holiday gifts or other seasonal purchases. These people don’t “drop out” because they weren’t successful, they drop out because they achieved their goal and don’t choose to sell or work all year. For many, they’ll join again the next year to make extra money, and drop out just the same, continuing this cycle.
MYTH #5: Network marketing is an outdated method of buying and selling.
FACT: More and more people are getting involved in network marketing because they enjoy the personal service and attention that accompanies purchasing products in this way. In fact, direct sales have increased 79% in just over a decade from $17.94 billion in 1995 to $32.18 billion in 2006. (To see a full year-by-year chart and other stats, visit DSA’s Web site) With hundreds of direct selling products and services to choose from, both those looking for supplemental income and those looking for a fun way to shop and socialize with friends find network marketing appealing. In-home presentations offer great opportunities to chat with friends in a relaxed atmosphere and browse through great products at the same time. And, you might even learn a new tip, trick or skill, or even pick up a new hobby.
Many network marketing companies today emphasize education about a particular topic, taking the focus off the sale and onto personal health, self-improvement, and having fun. Similarly, person-to-person demonstrations of products provide an opportunity to try products, talk to a knowledgeable salesperson and get personal service that only comes with direct selling. Outdated? Not at all! Today’s consumers demand high levels of personal service that many retail establishments just can’t deliver. Couple that with fun and flexibility, and you’ve got a winning combination. Network marketing is based on people so it easily changes with the times.
MYTH #6: Network marketing products are overpriced.
FACT: The consumer market won’t sustain products that are overpriced for long. Competition is a powerful force, and products that aren’t competitively priced won’t sell and can’t last. But for network marketing, there’s a bit more to the price equation than might immediately meet the eye. The decision to sell a product through network marketing is often based on very specific factors. For example, products that require demonstration to convey the finer points of their operation are ideal for direct selling because a knowledgeable salesperson can personally conduct that demonstration for every customer. In a traditional retail setting, consumers might not understand the product’s unique qualities based on appearance or packaging.
It’s true that some network marketing products are priced at the upper end of the retail market’s acceptance level, but there is higher acceptance based on the value-added incentive due to the quality of the products, the demonstration and education of the products, as well as the personal service available. Lexus brand cars are also at the upper end of the retail market acceptance level, but the quality of the product and the superior performance and service after the sale make that higher price reasonable. Each customer needs to weigh the price, quality and desirability of a given product and make a purchasing decision accordingly.
MYTH #7: Network Marketing companies are unregulated.
FACT: Several governmental bodies, as well as the Direct Selling Association and organizations like the National Association of Consumer Agency Administrators, National Consumers League , and Better Business Bureau work to protect consumers against fraud. It is an unfortunate truth that some scam artists try to masquerade as legitimate network marketing companies, making these laws and regulations necessary. Here are a few of the protections on which consumers can rely:
- All 50 states and the Federal Trade Commission (FTC) have cooling-off laws that provide consumers with an unconditional 3-business-day right to cancel an order or contract. These laws are designed to counteract high-pressure sales and allow people who change their mind about a purchase to make a quick and easy return.
- In addition, all 50 states, the FTC, the Securities & Exchange Commission (SEC) and the U.S. Postal Service have anti-pyramid scheme laws or regulations that they can use to prosecute and shut down such frauds. (See citations for examples of State anti-pyramid scheme laws.)
- On the federal tax side, the Internal Revenue Service (IRS) regulates direct sellers through a special form, 1099-MISC, to insure income tax compliance by direct sellers. Network marketers (direct sellers) are independent contractors by virtue of section 3508 of the U.S. tax code. A 1099-MISC form must be filed for all network marketers who have received $600 or more from the company with which they are affiliated. In addition, a 1099-MISC form must be filed for those purchasing on an annual basis $5,000 or more of consumer products from the parent company. Network marketers also must file a Schedule C with the IRS in order to claim business expense deductions.
- The Direct Selling Association’s Code of Ethics is also a powerful self-regulatory document by which all DSA member companies must abide. The Code includes important provisions including a buy-back requirement (for both inventory and sales aids), a cooling-off period and other provisions enforced by an Independent Code Administrator. Consumers who feel a Code violation has occurred should file a complaint with the DSA Code Administrator.
MYTH #8: Most companies require inventory purchasers; direct sellers who drop out are stuck with the inventory they purchased.
FACT: Companies that belong to the Direct Selling Association agree to abide by a strict Code of Ethics. Among other things, the Code requires members to:
- Repurchase marketable inventory and sales aids purchased in the past 12 months for at least 90% of the purchase price if a direct seller decides to leave the business.
- Explain the repurchase option in writing.
MYTH #9: If you attend a network marketing presentation you are expected to buy something.
FACT: The only thing you have to do at a presentation is enjoy yourself, …and hopefully learn! And the key to enjoying your experience is to work with knowledgeable and friendly associates who can tell you about products or services, answer any questions, and let you and your friends peruse the items on display or in catalogs that offer a wider selection. You’re absolutely not obligated to buy; but chances are you’ll walk out with something you’ll really enjoy.
If you would like to purchase some of our unique nutritional supplement products before enrolling into the business, please visit: http://www.customer.usana.com/
MYTH #10: Everyone who gets involved in network marketing wants an easy way to make money, and do so by taking advantage of others.
FACT: People choose to get involved in network marketing for a lot of reasons. Some hope to make it a full-time career, but most enroll to either earn a little extra money or to receive a discount on their own purchases. Legitimate network marketing companies are very careful to represent earning potential accurately. The DSA Code of Ethics requires companies and their salesforce members to provide potential independent sellers with accurate information about the company’s pay structure, products and sales methods. (All of these are found on this website …see below.) And no one should be fooled into thinking direct selling is a way to make money with little or no effort. Don’t be convinced by ads or people who tell you you’ll instantly make thousands of dollars just by signing up or recruiting a few people. As with any business, it takes time to establish a customer base and build a business by sponsoring others who are just as committed as you. While network marketing is not a “get rich quick scheme,” you can be financially successful in a relatively short period of time compared to working a job if you establish your goals and are committed to reaching them. Legitimate network marketing opportunities offer the flexibility to set your own goals and achieve them on your own terms.
Network marketing is not about taking advantage of anyone. In fact, the opposite attitude is prevalent. With our compensation plan, we follow the Formula for Success: “you can get what you want by helping enough people get what they want.” You will be providing people with products that can change their health and lives, AND assist others who wish to attain financial freedom. Everyone has an equal opportunity to earn as much money as they are committed to making based upon their efforts. This equal opportunity absolutely does not exist in traditional businesses. Can the employee make as much, or more money than the boss who hired him? In network marketing the new enrollee is taught and encouraged to make as much, if not more money than those who sponsored them.
This Movie Explains Our Company's Compensation Plan
Income Disclaimer:
Although some associates are routinely making more money than shown and some associates making less (YOUR income depends upon YOU, not others) the following will give you a rough idea of what the average associate is making.
“$91,800 is the average yearly income for an established, full-time USANA Associate (Gold Director and above). $23,225 is the annual average of those who earned as little as one commission check each month. Surveys show that 83% of all Associates self-report they joined USANA to “improve their health.” Of those remaining, 21% earned a check at least once a month even though 56% reported they were not joining to “replace their full-time income.” Of those that were, 41% have been Associates for at least one year and 56% are considered full time with the title of Gold Director or above. These figures shown should not be considered as guarantees or projections of your actual earnings or profits. Success with USANA results only from successful sales efforts, which require hard work, diligence, and leadership. If you include all 126,146 with the title of Associate, which includes, Associates not actively building a business (acting as wholesale buyers), Associates who just joined (as little as one day), and those who are just beginning to build their customer base, the average yearly income is still $734.27, with more than one in three earning a check and 115 Associates who are lifetime Million Dollar Earners.”
To Join Our Team for True Health and Financial Freedom, OR to learn more: Please CONTACT US.
