Frequently Asked Questions
These are a selection of frequently asked questions about Network Marketing and the Forever Living Products opportunity. If we have not answered your question here, please do not hesitate to contact us.
What is Network Marketing?
Also sometimes called Multi-Level Marketing (MLM).
In conventional product distribution, manufacturers sell to distributors, who sell to wholesalers, who supply retailers, who sell to the consumer. At each stage there is both a profit take, and costs of facilities, staff etc. A considerable part of the cost of a product to the consumer in the shop is in fact produced by this process.
In Network Marketing or Direct Selling, the manufacturer supplies Independent Distributors who sell direct to the consumer. Rather than a chain of expensive large shops, the products are marketed by many independent distributors with low costs. It is this "many, each doing a little" that makes Network Marketing successful. As these distributors will often work from home, their costs are low. To incentivise and reward the distributors, the costs that would have been lost through the "friction" of conventional retailing distribution are turned round and paid to distributors as commission on the sales they make. Forever Living Products return over 60% of the product retail price to the Independent Distributors. If this seems high, remember that no one is paid a salary for selling the products - would you work for nothing?
For a list of companies who use Network Marketing or Direct Selling to distribute their products - Click Here. Recent additions include Penguin Books and Nestle Chocolate.
If you look on the internet, you will find many views on MLM, and these are often polarised strongly for and strongly against. As with all things in life the truth is somewhere in between, and we encourage you to make your own mind up.
Do I have to be a Salesman ?
Yes and No. People from a sales background often fail in Network Marketing. In fact it is true to say that traditional selling practices simply do not work in Network Marketing. Michael Oliver - the 'guru' of Network Marketing describes it as "natural selling", or "selling from the soul".
The essence of Network Marketing is using the products yourself, and then recommending them to your everyday contacts (your network). If you hear a new CD or read a book that you think is great, you tell your friends about it - yes? Network Marketing is the same thing, use the products and tell your friends, relations, the man next door, etc about them. You would not use the same methods you might use to sell a used car on friends or family would you? Network marketing is not therefore the same as selling double glazing or insurance, and you do not need to be a salesman to do it.
How Does it Work?
Step 1 - We sponsor you as a Distributor. On each sale you make you get the mark-up on the product, plus you earn commission (amount depends on position in the marketing plan).
Step 2 - You find other people who are interested in becoming distributors, and they join your team. You still get the profit on personal sales, and your personal commission, but you now also get a commission on the sales of your "down-line" distributors.
Step 3 - Your "down-line" distributors build their own businesses, and add new distributors, and you get commission on their sales....
and so on.... As your team gets bigger, you and they rise up the marketing plan. Eventually members of your team will become managers, and you will get a bonus. If you are feeling uncomfortable about earning commission on the down-line sales - remember that your team members will only succeed if you help them to. The commission you earn is for your support and encouragement along the way.
Do I have to sell Door to Door?
No. Although some direct selling businesses (eg Betterware, Kleeneze, Avon) do sell door to door, this is not the only way to distribute products, and does not work for all. We would not suggest door to door selling as being appropriate for the FLP product range. It will however involve an element of "cold calling" to build up a network of customers and 'down line' distributors. You will make most sales to people you already know, to people you meet, through advertising (inc word of mouth) and possibly through the internet.
Is There a Minimum Sales Volume?
Not in the sense of a monthly or annual target.
Your progress up the marketing plan is dependent on the amount of sales made by you and your team (down line). However, there are no minimums (minimum volumes apply for qualification for progress up the marketing plan, and for payment of commission), and once you have attained a particular level you cannot go down, nor can your down line overtake you. Obviously it is in your, and your teams, interest to make sales each month as without sales there is no income, but you do not have a minimum target to achieve.
Are the Products Overpriced?
Some claim that Network Marketed products are over priced due to the commissions paid to the line of distributors and the retail mark up. What you must remember is that no one gets paid a salary to sell the products. In conventional retailing distribution the products are handled, displayed, marketed, sold, and re-ordered by people who get paid to do it. The salesman drives a car provided by his company who also pay for his fuel, and he gets a salary plus commissions on each sale he makes. The goods are displayed on shelves by people who get paid to put them there, when they are bought the payment is taken by someone paid to do that job. We cannot see these hidden parts of the product price in a shop, but they are real and significant. The manager of a shop is paid more than the assistants at the checkout because he/she is the manager and their skills as manager keep the shop owner happy, and the shop in business. In Network Marketing it may be done a little differently, but much the same applies.
How Can I Manage all the Sales I will Need to Make?
If you tried to generate all your desired income solely through product sales you would quickly find yourself overwhelmed and thinking about taking on staff and renting premises. The latter would eat into your profit (income) and simply generate in time a need for more staff and bigger premises. Modern retailing only makes a reasonable income, after overheads are deducted, if high volume sales are made.
Network Marketing makes a different proposition. Instead of you trying to make lots of sales, you put your energy into building a 'down line' of distributors, and they create their own down lines and so on. The Network Marketing creed is "a lot of people, each doing a little". You can still keep costs low by working from home, but still generate your desired income.
People Say the Maths Don't Add Up?
People say a lot of things don't they! Lets look at the UK Market...
In 2003 FLP turned over £30m in the UK, or about 50p per head of population per annum. Of course not everyone uses Forever Living products. Average spend per person per annum on Health and Beauty products in the UK is around £200. FLP wants to grow to £100m in the UK which on the same basis works out at about £1.40 per person per year - this seems to be quite feasible.
A comment frequently made is that the base of Network Marketing cannot expand forever, and eventually no more growth can occur. This is of course quite true, but also completely theoretical as it assumes linear expansion of the marketing structure. In practice a number of things occur. Not all down lines will continually extend, some will peter out, while others may reach an equilibrium where the members of the down line no longer seek expansion of their business. Not everyone succeeds in Network Marketing, and losses in the first few months can be high. Further up the line, people retire, or die, or just stop being active. This creates room for new active distributors. Eventually growth will slow, but we are not at that point yet by a long chalk.
The UK Health and Beauty Market is actually worth £11bn per year (Source : BBC). Therefore Forever Living is looking to grow to about 1% of the UK Market from a current position of around 0.3% - this does not seem at all impossible in a sector where supermarkets and grocers control 46% of the market between them. At the end of 2003 there were about 40,000 registered distributors of Forever Living Products, not all of whom were by any means active (once registered you stay so even if you cease actively selling). If 40,000 distributors generated a turnover of £30m in a market which can easily grow to £100m, then there would seem easily to be room for about 80,000 more (100/30 x 40,000 - 40,000). You could be one of them!
Is it Really Possible to Succeed?
Yes, but it will take hard work and dedication. Think of flying away for an overseas holiday. The jet can taxi around all day, but to get off the ground and fly takes a full power rush down the runway. Your business will only take off if you put similar effort into it. If you put this effort in then you will soar like a bird. The laws of physics say that it takes six times the energy to get a mass moving as it takes to keep it moving at constant speed. Network Marketing is similar, effort is needed to get it started.
How Costly is it to Start Up?
Your initial investment is in a combi-box which costs just a bit less than £200. As you sell products you will replace them. FLP does not encourage distributors to hold large volumes of stock unlike some other Network Marketing operations. You will also need to think about business cards, stationery, etc which initially may perhaps cost you £50 or so. As your business develops you may need to make further investments in advertising and promotion, but always with an eye on getting a return for your investment. Remember that at the core of Network Marketing is the basic principle of use the products, then recommend them to your friends/family/contacts - this costs nothing!
What Training is Provided?
Forever Living run training sessions throughout the year. Some are run at local centres around the UK, others are run in Warwick or Telford areas attracting delegates from all over the UK. Some training is on the products, some on Network Marketing, others on aspects such as accounting. Speakers are either motivational, or are acknowledged experts. The cost of these is low, usually no more than £20 for a days training. Many commercial courses cost over £200 for a day, so these are very good value. On-line training you can do at home is also available.
Starting a Business from Home - FAQ
FAQ on starting a business from home can be found here