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Investing in the Hidden Expenses of Network Marketing

It is important for every network marketer to know, regardless of their company, product or service, there is always some level of risk and expense in the sales mode of the business.

That expense could be actual product, catalogs, website, kits, samples, printed materials, postage, registration fees, booth collateral, membership fees or even just your time.

These expenses should be factored into your budget for the business and considered when you look at joining a company. There will be SOMETHING and you should be prepared to cover that expense.

BEFORE you sign up with any network marketing company, do some math.

  1. List out all the possible expenses you could incur during the sales process. Think of everything you could encounter from the normal to the unexpected

  2. Include something for your time as an expense.

  3. In my oil business I use a flat rate for my time rather than an hourly rate

  4. Regardless of method, it is important to pay yourself in money aside from any product, incentives, etc.

  5. Add in any incentives, bonuses, rewards, products IF you must spend something to earn them

  6. If the incentive, bonus or reward is truly a “freebie” that I did not have to spend anything to receive I list it on a separate line from my rate under the category of “bonus” as it should not be counted as part of your expenses

  7. If you had to spend even $1.00 to receive that incentive, bonus or reward  then $1.00 should be totaled into your expenses. Anything that comes from your personal pocket to make money from this business is an expense

If the total of those expenses are not easily and quickly recouped when someone purchases, enrolls or signs up with you then question why you are joining that company.

Ask yourself what is your true reward, value or commission from the investment you will make in that company?

Again, those expenses should be EASILY and QUICKLY recouped at the point a sale is made. 

Bear in mind, if your potential customer gives you a rejection you alone are out those expenses.  At a minimum, you have spent time in that situation.

While you should be fully prepared for rejections, this should be counterbalanced with the return on investment you receive with a sale or yes.  You however need to manage these types of expenses and monitor them over time to ensure you are truly getting an eventual return on your investment and costs.

The upfront expenses in the sales mode for my essential oils business usually consist of:

  1. Small dram containers to hold sample oils

  2. Collateral materials,  booklets, magazines, fact sheets, a personal note

  3. The oil itself which I take from my personal supply, each dram consisting of 20 – 50 drops of oil per dram; cost is dependent on the oil I’m sharing and container size

  4. Postage, padded envelopes or small boxes

  5. Printing supplies (business cards, labels, stickers, paper, ink)

  6. Thank you gifts, class gifts, etc

  7. My time

Before I enrolled the first person or made my first sale, I did the math to confirm I would see my investment back from those activities. I can clearly see these costs are easily and quickly recouped with each sale and enrollment as well as providing a residual from  monthly ongoing sales.

Let’s face it, you’re taking money out of your own pocket to invest in your new business. You cannot operate in the red and be successful.

How do you check and balance your hidden expenses?

Interested in more?

doTERRA essential oils is the largest network marketing company in the U.S. They are completely debt free and their retention rate of consultants is 85% – the highest of any network company in the world. The commission structure is unique and has several advantages and benefits for the consultants.

If you’re interested in essential oils and want to join a company that truly pays its consultants, reach out to me and let’s connect. You can contact me via this blog or email at dragonspitapothecary@aol.com 

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