Network Marketing 101: Start-up costs for your business


Since I started my virtual business in 2009, I’ve spoken with A LOT of people. (Read my story here.) My business is a hybrid of direct sales and network marketing. (Not sure what the difference is? Check out my overview here.) Anyway…over the years, I’ve been asked a number of great questions regarding my company, the industry, etc.

I recently had a brief conversation with a man who was looking into a consultantship with our company. We spoke for about 10 minutes before I had to jump on a conference call. He was very interested (based on the short dialogue we had) in continuing our conversation and further exploring our company, compensation plan, etc. and asked me to email him further information once my other call was finished. We’d even set a follow-up date to reconnect.

So, shortly after my conference call, I emailed him the additional info. Because our initial call was so brief, we didn’t get around to talking about training, start-up fees or even a product overview…so I made sure to include links to this information in the email he requested.

Within 10 minutes, he replied:

“Krista, the start-up fee, albeit modest, is a turn off. People shouldn’t have to pay. I’ll pass on this offer. FYI – You may want to mention the fee at introduction.”

From a time management perspective, I’m glad I had to jump on another call so quickly – so neither of us wasted any more of each other’s time than we already had. Even on that initial call, I told him our company is a direct sales company. I didn’t bring up start-up fees at the onset of our call because it wasn’t appropriate timing. This industry is all about building relationships with people.

If a representative is promoting investment options within the first few minutes of a phone call (unless they are asked directly), that is a big red flag to me that all the rep cares about is pushing product kits and front-loading new representatives with inventory. Now, of course this is an area that needs to be addressed, but it needs to be covered in the business presentation…not in a 10-minute “get to know you” call.

I’m telling you all of this because it’s my desire to educate and empower those who are exploring any home-based business. All companies in this industry are going to require a nominal start-up investment. For my company, the minimum required fee is $45. If someone is turned off by a small fee to start a business, then entrepreneurship may not be for them.

Business-building is all about taking small, calculated risks. In our case, the $45 start-up fee gets our new representatives a business portfolio that includes some training materials and a welcome informational DVD. Clearly, these materials cost money to produce, therefore, a minimal fee is necessary. It’s very similar to enrolling in college classes. You have to purchase books to have the necessary course material to be prepared for your classes. This is a comparable investment. 

So when you’re exploring business opportunities, don’t be taken aback by the start-up cost. While some may require a flat fee, others will have a range of start-up options – depending on your budget. Ours range from $45 to $995.

Any industry that allows you to turn a $995 investment into an income stream that can turn your annual salary into your monthly income is definitely worth the cost to get started. That’s just my opinion, of course. 🙂

Do you have a passion for social media or wish you could find a way to generate extra income online? Click here to find out more about how you can start creating an income from a virtual business in just a few minutes a day!


About Krista Farmer

Krista shows people how to use social media and technology to create sustainable residual income from home. Click here to learn more about how you can earn extra income online by following her simple system.

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