Secrets of Network Marketing
Why is multi-level marketing so popular today? Why is this business model worthy of consideration? Isn’t this just for people who can’t find a real job? Aren’t those “companies” just scams to take people’s money? Losers come this way – join now – right?
If any of these questions come to your mind – ask yourself – is it because you’ve done your research, or are you just parroting what you’ve heard?
We’ll define network marketing later, but first it’s important to look at, and anyliae some data about this industry.
This industry has expanded tremendously, with more than sixty one million people now involved all around the world. Over 14,000,000 people in the United States alone, are in a home based business, specifically network marketing.
More than 1 billion dollars of retail goods were sold globally through the Network Marketing industry! The number of sales in the United States alone is staggering. It’s over thirty billion dollars.
If so many people and so many companies are following this way of doing business, it’s a good idea to at least take a look at what it really is.
Just a few years ago – if you let anyone know you were into MLM, they would run for the hills, or often treat you like an outcast. So what’s happened to make this once maligned industry into a viable business model that organizations are standing up and noticing this way of doing business and getting into netwwork marketing as a means of distributing their product?
A ton. Primarily, there’s a great deal more oversight and legislation regarding these multi-level marketing companies.
Government agencies and watchdog organizations regularly police this industry to ward off abuses.
Secondly, MLM is a very different structure than corporate america, and provides much more opportunities for self employment-in many cases, people are getting into the MLM business, who have never owned their own company or ran their own organization.
Thirdly, the MLM business model saves a heck of alot of money over more traditional distribution channels and ways of doing business – and people are interested in that – especially in an economy like this one.
What are the nuts and bolts of this type of business?
“Multi-Level Marketing is a legal system of merchandising products through multiple levels of distribution (distributors). These distributors purchase at wholesale and act as a middleman between the manufacturer and the consumer who pays retail.” This is one of the first formal definitions, published by Doris Wood of the MLMIA.
MLM is a type of direct sales – companies that use distributors to directly get their product or service out there in the market place. They make commissions based upon the total dollars or volume of products and services that they sell.
Some direct sales companies just pay the distributor every time they make a sale. In MLM, not only are you compensated when your client directly purchases your product or service from you ,you also get paid from the efforts of people who join under you in your organization. So, you have the opportunity for leveraged and residual income – getting paid over and over for doing the work once.
Network Marketing or MLM provides people with the opportunity to build their own sales organizations, and get paid commissions based on the sales generated by your downline. When you bring people into your organization you build levels under you. Then those people build levels under them – and so on, and so on… How far down the levels that you will be allowed to collect commissions depends on the structure of the particular company you are working for.
With MLM’s, your commission qualifying is based upon the number of people in your downline, the number of sales that you make, the total revenue that you bring in, and many other factors that work together in different ways – depending upon your company’s structure.
Traditional business does not allow for advancement like this. Imagine if you got a job frying French fries at MacDonald’s. What are the chances that you would advance to CEO or president, and get the big bucks? Even though it’s possible, the odds are against it for the majority of people.
Not so with network marketing. The average person can – and often does – rise right up through the ranks and start making the kind of money that only officers of corporations would normaly make. The only limitation you have is that which you place upon yourself.
Why are more and more traditional companies choosing to distribute their products and services this way?
It’s a more economical way to structure a company. Most traditional companies have a long line of middlemen throughout their distribution network, and these middlemen suck up money. With MLM, these middlemen are eliminated and the people who actually do the work and make the sales are the ones who are paid the big bucks. There no glass ceiling, no discrimination, no brown nosing…You get the picture : ) There are usually no expensive marketing and advertising campaigns-network marketing companies rely on their distributors to get the product out there by word of mouth. It’s a win – win situation for everyone involved. Many people these days are turning to network marketing – why? Why should you spend your valuable time considering and researching this business model? I guess this business model is acceptable if you can’t find a job in the “real world” – right? Isn’t it like a pyramid scheme and illegal? Only losers and the gullible types fall for these schemes!
If any of these questions come to your mind – ask yourself – is it because you’ve done your research, or are you just parroting what you’ve heard?
We’ll define network marketing later, but first it’s important to look at, and analyze some data about this industry.
This industry has expanded tremendously, with more than sixty one million people now involved all around the world. In the United States alone, over 15 million people are building their home-based businesses through Network Marketing.
More than 1 billion dollars of retail goods were sold globally through the Network Marketing industry! Over billion dollars of those sales were here in the United States!
If so many people and companies are doing business in the multi-level marketing industry, isn’t it worth having the intellectual honesty to really research this business model?
Just a few years ago – if you let anyone know you were into MLM, they would run for the hills, or often treat you like an outcast. This once maligned business is now widely accepted as completely legitimate, and a sought after business model that more and more companies are taking note of and incorporating into their structure?
Much in every way. First of all, the oversight and laws governing network marketing companies are now much more strict.
Government agencies and watchdog organizations regularly police this industry to ward off abuses.
Second, the very structure of Network Marketing provides a strong opportunity for entrepreneurship-people who have never owned a company or ran their own business can often step into this industry and be successful.
Thirdly, the MLM business model saves a heck of a lot of money over more traditional distribution channels and ways of doing business – and people are interested in that – especially in an economy like this one.
What are the nuts and bolts of this type of business?
“Multi-Level Marketing is a legal system of merchandising products through multiple levels of distribution (distributors). These distributors purchase at wholesale and act as a middleman between the manufacturer and the consumer who pays retail.” This is one of the first formal definitions, published by Doris Wood of the MLMIA.
Multi-level marketing is a type of direct sales – where distributors directly market their products out in the business world and community. Distributors are paid a commission based on the sale of these products or services.
Some direct sales companies just pay the distributor every time they make a sale. With multi-level marketing, you get paid not only when your customer purchases a product,you’re also paid on the efforts of people that you’ve recruited to join your organization. So, you have the opportunity for leveraged and residual income – getting paid over and over for doing the work once.
Network Marketing or MLM gives you the opportunity to build a sales organization, and get paid commissions based on the sales generated by your downline. When you bring people into your organization you build levels under you. Then those people build levels under them – and so on, and so on… There are many differing pay plans out there and the number of levels deep you get paid varies from company to company.
In many Network Marketing companies, the more distributors that you have in your downline and/or the more sales you make, you’ll qualify for higher commissions or bonuses and higher ranking in the company.
When’s the last time you saw a compensation arrangement like this in the corporate world? Unless you’re a CEO of course… Imagine if you got a job frying French fries at MacDonald’s. What are the chances that you would advance to CEO or president, and get the big bucks? Even though it’s possible, the odds are against it for the majority of people.
The structure of Multi-Level Marketing provides the opportunity for an average person, who works hard and is dedicated, to move up through the ranks- and sometimes very quickly- and make the kind of money that CEO’s make in big companies!
Why are more and more traditional companies choosing to distribute their products and services this way?
It’s a more economical way to structure a company. Most traditional companies have a long line of middlemen throughout their distribution network, and these middlemen suck up money. With MLM, these middlemen are eliminated and the people who actually do the work and make the sales are the ones who are paid the big bucks. There no glass ceiling, no discrimination, no brown nosing…You get the picture : ) Costly advertising campaigns are a thing of the past, since each distributor is responsible for their own advertising – whether it be word of mouth or online. This has proven to be effective and lucrative for both the company and the distributor.
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