The forces of supply and demand are at work in just about any business. In every business, the business owner must consider the level of demand for the product or service being offered. If there are too many units (of some product for example) and not enough demand to buy those units, the business takes a loss and may fail as result of overestimating demand.
Many people start home-based businesses via Network Marketing companies (aka MLMs). There are good reasons for that: low cost of entry, lots of training and support, and lots of promises. One of those promises is often something along the lines of: Everyone wants to buy this product so you’ll have no trouble selling it. But Supply and Demand governs the products and services of Network Marketing companies as well.
Only so many people are going to be interested in that product or service the Network Marketing company is offering. At some point, it will reach the level of Market Saturation. Once that level has been reached it will become difficult (if not impossible) to sell the product or service after that point. Yet many Network Marketing companies ignore this simple fact and continue to focus on recruiting new people into the business (to sell yet more of the saturated product or service).
What does that mean to the person trying to start a home based business? Do you just write off Network Marketing companies as something that can’t work? Not necessarily.
The smart Network Marketing companies will be looking proactively at the level of demand for their products. They will spread the risk of demand around by offering an ever changing variety of products. They will also likely focus on reusable products in their business model. The market saturation factor is somewhat different when you talk about reusable products. For example, suppose the company is selling a unique line of bar soaps. Most everyone uses those. And not only do they use them, but they re-use them (again and again). A customer who becomes loyal to a certain kind of bar soap will likely keep buying that soap again and again. Smart Network Marketing companies realize this and focus on reusable products as opposed to products people buy only once in a while (or once in a lifetime).
So look to see how ‘smart’ the company is if you’re evaluating a Network Marketing company for your home based business. How many new products have they introduced in the past year? The past 5 years? If a service is being offered, how has the service changed to accommodate shifting demand? If the company is selling the same old product or service they’ve been selling for years, you might think twice. But if the company is innovative and continues to evolve, they may be a good opportunity for you.