There are far fewer service-driven network marketing companies than there are product-driven ones and I don’t think there are many in the UK.
These companies usually supply something that just about everyone needs, like energy or telephony services. In the US there are also companies that provide business services and insurance.
I’ve also seen a number of startups that sell kind of virtual things – beware these as they may well be scams. I well remember a company that sold lottery numbers on some sort of shared payout basis, but that didn’t last long.
And there was another American company some years ago that was selling virtual art – that’s probably not the right term but it amounted to that. There wasn’t anything physical and people were putting in vast sums of money.
Of course it was really just a pyramid scheme but it was very well disguised and fooled a lot of people for a while.
But the genuine service-driven NWM businesses seem to do well, though they operate on much lower profit margins, so this means they pay out a lot less to their distributors. There are some hybrid schemes operating in the UK. By that I mean they offer services but they also offer an investment-level opportunity for new distributors. They pay a hefty sum to get involved and that portion of their “investment” goes into a pyramid-style pot to be doled out to successful teamleaders.
Somehow they get around the pyramid laws, but it can hardly be ethical. Simple maths reveals that it’s unsustainable and a few people will get rich at the expense of all the others.
Anyhow, back to services. Although they pay out far less, they do give a very nice ongoing income. If you’re selling gas and electricity, you know that your customers will keep using it month after month, so it produces a more sustainable income for most distributors.
Of course you still get fall-out as customers switch suppliers, especially in the energy market when the government encourages people to regularly switch.
Service industries usually require more explanation than products, so the NWM will need to ensure their distributors are well-trained – especially in regulated markets.
So if you’re going into a service-based MLM, be sure to check out the training programme offered by the company before you take the plunge. This could make all the difference between success and failure.