WHAT IS NETWORK MARKETING, EXACTLY?
11:26:00
What is network marketing, exactly?
It depends on who you talk to.
I’m serious!
Talk to someone who joined a network marketing opportunity,
learned the ropes, took action and went on to build a wildly successful
business that pays them a solid six-figure, even multiple six-figure annual
business and they will tell you:
“Network marketing is the greatest
opportunity in the history of mankind for the average person without a lot of
money to invest to become financially free.”
Talk to someone who has joined a few different opportunities
over the years but who never really got in and “did the work” required building
a business and they might say something like this:
“Network marketing doesn’t work. The
only people who make big money are the people who get in early.”
So who is right? And if you think about it, neither
really answers the question: “What is network marketing?”
What is Network Marketing?
According to Wikipedia,
network marketing is way of doing business in which a sales force earns a commission
not only for sales of products and services they personally generate, but also
for the sales of others they recruit and bring into the business, which creates
a downline of distributors and a hierarchy of multiple leveraged levels of
compensation.
Whew. What a mouthful. Let’s break that down into something
that makes more sense, shall we?
You realize you will never get rich working for someone
else. You also know there are huge lifestyle benefits associated with building
a success business:
- You can pick the people you work with.
- You can work from home part-time in your spare time.
- You can pick the hours you work and how much you work.
- You can give yourself an IMMEDIATE raise through tax savings.
- You have the chance to literally set yourself financially free.
So you decide to investigate joining a network marketing
company because of the low cost of entry and all the training and support you
get. But what are you really getting yourself into? What is network marketing,
exactly? Here’s the deal…
When you join a network marketing company you are “signing
up” to represent that company’s product and services and business opportunity.
You “sign up” by making a small investment (usually $500 to
$1,500) and by completing an Independent Distributor agreement. You are not
being hired by the company as an employee but, rather, you are volunteering to
represent the company as an independent contractor, business owner, dealer,
representative or consultant. You are awarded a commission based upon the
volume of product sold through your own sales efforts as well as that of their
downline organization.
In other words, to make money you need to personally sell
stuff AND teach your team to sell stuff because you earn commissions on the
AMOUNT of product that moves through your new business.
What is Network Marketing? Think Franchise!
Consider a franchise operation like McDonald’s.
McDonald’s is one of the largest fast-food organizations in
the world. They have more than 33,000 restaurants that serves more than 64
million people in 118 countries each day.
More than 80% of MacD’s restaurants are owned and operated
by independent business owners or contractors.
Now if YOU owned the mother-ship corporation, you not only
earn money by selling burgers, fries and shakes from the 20% of the restaurants
YOU personally own and operate… you also earn a tiny percentage on all the sales
made by the entire organization including the other 80% you do not own or
operation. Meaning you are now earning a LEVERAGED income generated by the
time, talent and energy expended by the other business owners on your team.
Here’s another way to look at it…
Let’s say you earn a $100 commission for selling a
particular product and it takes you two hours of “work” to make a sale. Break
that down and your time is worth $50 per hour. Put in a full 40 hour work week
and you pocket a nice $2,000.
Let’s also say you have spent some time “recruiting” a few
people to join your team who also want the chance to earn $100 per sale and you
earn a nice $10 check for every sale THEY make.
Over time you have built a team of 100 people. They each
make 20 sales per week – independent of your time and effort.
- YOU = 40 hours, 20 sales, $2,000
- TEAM = 4000 hours, 2,000 sales @ $10 each = you get $20,000
See the magic? You get paid on the time and effort of other
people. This is leveraged income versus linear income.
So perhaps a good way to answer the question: “What is
network marketing?” would be quote J. Paul Getty, one of the richest men in his
time:
I’d
rather have one percent of the efforts of 100 people than 100 percent of my own
efforts.
What is Network Marketing? The Reality…
Here’s the unfortunately reality, however.
No matter how you slice it, the only way you will ever build
a highly profitable network marketing business is to be willing to MASTER the
art and science of sales, marketing and leadership. Because MLM is form of
“direct sales” and no one makes a dime until products and services are sold.
It’s that way in every business, not just network marketing.
So the KEY is to join a company, track down who is currently
enjoying a level of success you aspire for, find out what they are doing… and
simply be willing to DO the same things. Which, of course, may require you
learn new skills and actually a few things (sales and marketing) you are not
comfortable doing in the beginning. So what is network marketing?
- Network marketing is a career choice and a profession.
- Network marketing is a path to fame, fortune and time freedom.
- Network marketing is a leadership development platform.
- Network marking is fun, fast and exciting.
- Network marketing is a proven “million dollar” business model.
Bless and be blessed,
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