Online MLM Sponsoring – Does the Funded Proposal Concept Make Sense?

The debate continues. Are “funded proposal” systems a good way to build your MLM business?

I am a participant in the “Warrior Forum“, which is without doubt the top online forum devoted to Internet marketing discussion. While there isn’t much said about MLM and network marketing there, from time to time a good thread does pop up.

Recently, a discussion started about using the “MLM lead generation systems” that are out there. These are the programs that promise to help you get leads for your primary business, while offering you the opportunity to earn money from affiliate product sales.

The idea is that you have a chance to make money from prospects who ultimately don’t join your business.

The affiliate products are usually E-Books or MLM training systems of some sort. The products are pitched to your prospects through autoresponders and sales pages, and you are taught how to contact these people to present your primary business opportunity also. One of the buzzwords for this type of program is “funded proposal”.

In theory, this works great. I found this discussion on the forum to be very interesting. Here is just a small part of it.

First, this comment was made:

I highly recommend to people who want to be successful in network marketing to reach out to their family and friends in the first 90 days of joining a business.

Then, this, specifically in regard to perceived dangers of using the “lead generation” systems mentioned above:

Here’s what happens to people who rely on the internet and templated lead generation systems to generate leads…

They get heavily involved in the internet marketing part of the business and eventually lose interest in and drop out of their primary business.

I thought this was interesting because I’ve seen this happen to people. There is a tendency, when trying to recruit through these systems, to get caught up in promoting the affiliate products primarily. One reason for this – fast profits.

You can sign up new associates for your business, but won’t necessarily see any significant income from their efforts for quite a while. Meanwhile, you find that these affiliate products can generate immediate income, and it’s easy to lose focus because of this.

I’m not saying not to participate in these downline building programs, but I am saying to be very cautious and understand that their primary benefit to you might be short-term income for you from the products, rather than substantial leads for your network marketing business.

Many of these systems are promoted by “MLM Gurus”….who email your prospects, as well as you, quite often….consider how distracting this might be.

Maybe it would be better to focus on building up your own name and create your own success, so that your prospects see you as the leader and not the guru? Just something to think about.