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What Exactly is Network Marketing?

Aug 17, 2007
To begin with, the concept behind network marketing is simple. Sharing - through product or business philosophy - is the basis of network marketing.

Network marketing is a multi-billion dollar industry involving millions of independent business people around the globe. Large companies like Gillette, Colgate-Palmolive, Kleeneze Europe, AT&T and others, have all turned to network marketing because of the very real edge it gives them in both domestic and international marketing.

Network marketing is a 'BIG' small business, which offers everyone, with or without business experience, the opportunity to start and run a home-based business that works. It is the last frontier where 'the little guy', (people like you and me) can make it BIG.

NETWORK MARKETING Vs. TRADITIONAL MARKETING

The traditional way of marketing products is to move them from a manufacturer through a network of middlemen. National Wholesalers, regional wholesalers, Cash & Carry warehouses, retailers, - the 'middlemen' - all add their 'valueless' percentage to the price of the product.

By the time the product or service reaches you, the end user, you're not only paying for the product, but a percentage of the price for each and every middleman in the network.

In network marketing there are no middlemen. Instead of paying them, a network marketing company will pay you for whatever amount of product you cause to be 'moved'.

As a sole individual operating alone, the amount of product or service provision you could 'move' from your own efforts, would be relatively small. In network marketing however, the amount you 'caused' to be moved indirectly could be huge.

Here then is the essence of a network marketing compensation plan. For not only will you be compensated for the product or service provision you personally cause to be moved from your own direct efforts, you will also receive indirect compensation for the product or service provision that your 'organisation' 'causes' to be moved.

YOUR 'ORGANISATION'

To be successful in network marketing you will need to build an 'organisation'. That is to say you will need to 'share' the benefits of both the products/service provision and the business opportunity with others. In network marketing this is referred to as your 'downline'.

The 'serious' money to be had in network marketing is to be had from what is termed as 'over-ride' commissions from the 'movement' of product or service provision from the 'downline' your 'sponsor' will help you to build.(In network marketing it is the responsibility of your introducing 'sponsor' to help you build your 'downline'.)

All you need to do initially to build a 'downline' is to 'share' with others the information about the products or service provision and the business opportunity on offer.

Theoretically, if after 'sharing' the information with others and you subsequently attracted just five SERIOUS individuals who decided to join you in your network marketing business - for illustration purposes only - your 'downline' could equate to the following after five levels of geometric
growth:

You

You sponsor just 5 SERIOUS people into your business.

Your level 1/ 5

They duplicate your efforts and each sponsor 5 SERIOUS people.

Your level 2/ 25

These 16 duplicate your efforts and each sponsor 5 SERIOUS people.

Your level 3/ 125

These 125 duplicate your efforts and each sponsor 5 SERIOUS people.

A little arithmetic will tell you that's theoretically a total of 3,905 people on your fifth level.

AN UNLIMITED INCOME POTENTIAL

Imagine the power of a business-building plan that would pay you an agreed 'over-ride' commission on each product or service provision 'moved' by each and every one of those 3,905 potential distributors in your downline. Network marketing then is about a LOT of people 'moving' a little product. The more people you introduce, the greater your income potential. Notice that I said SERIOUS people. You may find that you have to introduce 20, 30 or even 50 new distributors before you find a person who Gets SERIOUS about the business.

If you want to toss aside the potential earnings on offer as being ridiculous or impossible - DON'T. I personally have met people who are earning $5,000 to $50,000 per month (yes per month) from network marketing for part-time effort. Though the majority of networkers earn hundreds rather than many thousands per month, (most working part-time) it must be understood then that if you are to make serious income, you must put in serious effort. No free lunches here! The professionals in Network Marketing (those that earn HUGE incomes) recognise that to become successful you must "go through the numbers". That is, sort through lots and lots of people until you find those people who get SERIOUS about the business.

There are two prongs to earning in Network marketing. First, is, of course, building a ´down line´. But remember, a large organization of people who do NOTHING other than sponsoring others, earns NOTHING!

Second is, BALANCE and CONSISTENCY. Spend some time building your
organization yes, but also spend time PROMOTING your products/services
to others and use the products/services yourself!

SO HOW DO YOU CONVINCE PEOPLE TO JOIN YOUR BUSINESS?

The simple answer is you don't. You want those who convince themselves. If they are truly looking for a way to become successful, then they'll come to you to go after it. The key to achieving success in network marketing is not to be had by convincing people, but by helping those (SERIOUS) people who want to become successful themselves.

WHERE DO I FIND PEOPLE TO JOIN ME IN MY BUSINESS

As it has been estimated that 20% of the UK working population - that's approximately 6 million people - would be interested in starting their own business, the marketplace in the UK alone is truly enormous. With a recent MORI poll indicating that 50% of 16 - 25 year olds were interested in starting their own business, the marketplace is actually growing.

One of the most important things to recognise is that the most precious resource available to you is in the new blood - the millions of business opportunity seekers who are not presently involved in networking. For it is there that you will find the success stories of tomorrow for your downline organisation.

The impact of the Internet on network marketing will be absolutely HUGE.

CHOOSE THE RIGHT COMPANY

In any successful business it is the quality of the product or service that is being offered that is the single most important aspect for its success.

The most lucrative compensation plan in the world will NOT provide you with an on-going residual income if the product or service doesn't provide tangible value and benefits for yourself and your customers.

Provide a product or service that people need, want, coupled with a business opportunity they are willing to tell their friends about and you can build yourself a business empire in network marketing!

TIPS FOR THE TOP?

Tip# 1/ If you're already involved in a network marketing programe and you're being 'sold' primarily on the benefits of the compensation plan with the product or service being offered as a secondary consideration, then read the above paragraph again and MOVE to a company whose products or services 'move'.

Tip# 2/ Ask yourself this important question: Is the network marketing programme I'm considering joining one that I'm willing to share with my friends and family? The comment "I don't want my friends and family to know what I'm doing, l want to become successful first - then I'll introduce them!!" is almost legendary in network marketing. (A comment oftimes made by failed networkers who had no real belief in the company or the products they were promoting in the first place!) If you immediately feel
comfortable with the prospect of letting your neighbours, your friends and your family know about the network programme you're considering joining, have belief in the company and its products/service provision, have confidence in your introducing sponsor, then you have probably chosen the right company to work with.

Tip# 3/ Don't be impatient by expecting things to happen overnight! Building a moderately productive downline in any network marketing programme takes TIME - many months not many weeks.

Tip# 4/ Read tip 3 again and avoid like the plague any company which suggests otherwise or does not require you to invest in the development of a distributor base. If your prospective sponsor in the network marketing programme you're being invited to join doesn't stipulate that it takes TIME to build a significantly productive downline then it's not a business your being invited to join but a game - and one you're bound to lose!

Tip# 5/ If you want to dine with the classes - deal in products or services wanted by the masses!

If you have tried Network Marketing before and failed, you probably chose the wrong company, the wrong sponsor, or the wrong product.

IS NETWORK MARKETING FOR YOU?

A message from the Prime Minister the Rt. Hon. Tony Blair MP to the Direct Selling Association.

" I'm delighted to offer my support to the Direct Selling Association and point out to you how big a part direct selling is of our domestic market in the sale of goods and services. We've got something like 13% of the entire home shopping market done by direct selling, almost half a million
people are involved in direct selling and 40,000 of those are doing it full time...It also shows how, in a changing economy and changing labour market, there are great new opportunities out there.

I want to say to you that this is a good thing to be involved in and that we, as a Government recognise the tremendous contribution that people who are taking up direct selling opportunities can make to the overall prosperity of the economy. So it is well worth doing, well worth being involved in and I wish those of you who are engaged in it, the very best for the future."

The above is the text of a video message given to members of the Direct Selling Association on the occasion of the DSA's Annual Conference held at Hinckley Leicestershire on 5-6 May 1999.

TO SUM UP

Network marketing isn't for everybody. While some people swear by network marketing, others simply swear! (Read tip No. 3 again to find out why). To succeed in network marketing you will need determination, commitment, enthusiasm and most importantly - a burning desire for success. If you believe you have those qualities get back to the person who provided you with this information TODAY.
About the Author
Jason Oickle enjoys teaching people how to be successful online Professional Internet Marketing Course
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