What is Network Marketing
If your on this page, this is probably the question going through your mind right now what exactly is this network marketing business model.
This business is about utilizing your network and building new networks of customers and distributors to generate sales of products and services.
To this day, many “possibly even you” associate it unfairly as a pyramid or ponzi scheme. In the 1950′s when Franchise’s first emerged they where labeled a scam, illegal etc.
Today, many traditional businesses embrace this form of marketing, it allows them to reach customers they might not otherwise. Generally, you cannot see them, it could be your next door neighbor is involved in it right now. Typically a home business does not have giant signs or large offices, yet according to the Direct Selling Association (DSA) over 13 million people in the U.S. are working within this business model.
It is a form of business in which you can make a small investment and through sheer tenacity achieve staggering levels of financial reward and personal freedom.
I believe Robert Kiyosaki summed it up nicely; it really is the business school for people who like helping people!
Let’s take a look at the two types of business models that you could be involved in or approached with:
Network marketing / Multi-level marketing (MLM)
These companies typically though not always offer reasonably priced products and services that people consume in a short time. Generally, the commission structure is less up-front then the direct sales companies, but it has a benefit that most direct sales companies do not have which is the leverage from building an organization.
Today there are hundreds of companies you can look at, they cover everything from: Communication Services, Internet Access, Nutritional Products, Weight Loss Programs, Water Filtration Systems, Financial Programs, Electrical Power, Solar Power.
- Typically costs less to get involved, from free to a few hundred dollars.
- It allows more people to become directly involved.
- It can build lasting residual income.
- Leverages the time of others.
This business model is about building relationships while building a distribution system; the ability to sell is not the most important part of the business skill you need. The ability to share your vision with others and the ability to duplicate a distribution system (yours or the company’s) is what will bring you success.
Direct Sales Companies
These companies are known as seller-based, they market higher priced, usually one time sales items. The benefits of these programs are you make higher commissions, yet often they have very little if any residual income.
Essentially if you stop working so does your income, you are paid directly on what you personally sell, you have to sell lots and lots of merchandise. This also limits you to the type of people you can bring into your business as the “salesperson” type.
Affiliate programs fall under the direct sales company model. You only get paid when someone orders a product. There is nothing wrong with affiliate programs, some of them do produce a residual income as customers order the products or services on a continuous basis.
The only issue, I really have with many but not all affiliate programs, is the company then has the customer contact information and they really no longer need you anymore. It then becomes a one time sell for you, a long term contact for them.
Do Only People At The Top Make Money?
| Here is a great Explanation from Tim Sales on who makes the money. |
| Who’s Lying? |
How should you believe when it comes to factual information about what you read and hear? |
