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What is Network Marketing?




Network Marketing

Introduction

Network Marketing is the current term for what was originally known as Multilevel Marketing, or MLM. Social Marketing is also sometimes used, but they are all the same business system; one where a manufacturer of products or services uses common people, you and me, as distributors to sell their products/services directly to the consuming public without commercial distribution or advertising and marketing.

The original MLM companies were pioneers, starting in the late 1940’s and 1950’s, in nutrition and green household products, but now almost every consumer product and service imaginable is offered through this method.

Innovative Pay Plans

The “Multilevel” in MLM comes from the other significant innovation of this business, that of being able to recruit new distributors into their personal organization, or “downline”, and get paid on their sales efforts, for as long as they are in business! This was, and still is, a radical concept in sales compensation, and the key to a very good and stable income for you!

Network marketing companies use what would otherwise be advertising, sales, marketing and distribution funds to pay commissions directly to its distributors and their downline organizations. This is what makes network marketing such a powerful wealth vehicle for the average person.

In no other business, can you get paid not only for your own efforts but also for developing and mentoring others to help them achieve success similar to yours. Tens of thousands of millionaires have been made by motivated people in the network marketing industry who started with nothing more than their own ability to tell others about the products they offer. Think of the possibilities for your success with the availability of inexpensive websites and online traffic generation methods.

Everyperson’s Franchise

The start up costs for a network marketing business are minimal. Typically it is nothing more than paying a distributor fee and the initial cost of products for personal or demonstration use and whatever marketing methods, online and offline, that you will use to attract business builders and product users.

Compared to a conventional franchise business, or even the cost of training to be a realtor, MLM opportunities are truly available to almost anyone with a desire to build a business, and the equity that comes from it, for themselves.

And, like other businesses, network marketing businesses have equity in the marketplace. That is, they can be willed to heirs and bought and sold outright because they have a market value that can be independently determined by gross sales, history and good will.

Downside

The most significant downside to a network marketing business is the bad name that has been associated with the term, MLM, by some people. It has often been wrongly called a “Ponzi” or pyramid scheme because of the lack of understanding of the pay plan and distributors who have taken advantage of naive newcomers and some unscrupulous MLM start ups that cheated investors and early distributors. Even one or two of the pioneer companies in the field have been in legal trouble in the past for overselling the business opportunity to prospective new distributors and other unsavory practices.

But, keep in mind that pyramid schemes are illegal and that detractors and the unmotivated will use any bad rumor to try to distract you from your personal improvement goals. A business start up of any kind is not for everybody!

The other downside to a network marketing business is that it is a commission only business. You will only get paid after you have sold products. These are self funded businesses, so you need to either start part time or have some reserve funds to draw from while you develop your business. This can be a serious problem for some, but, the rewards of building a business from scratch, from nothing, to something that can provide a large and stable income for the rest of your life are invaluable to those who take on the challenge!

Matrix Plan not Pyramid

Think of the compensation plan of a typical network marketing company as a “Matrix” of companies that exist because you helped those business owners become successful enough to be independent. You are paid for your leadership efforts as those companies become more successful by building new business leaders in their “matrix”.

If anything, according to Robert Kiyasoki, it is an upside down pyramid, that is, one with few at the bottom and many at the top.

Choosing a Network Marketing Company

As I stated earlier, there are many different companies in the MLM field, so choosing which company to join can be difficult.

As with any other decision of this type, look to yourself first for guidance, here a few suggestions:

  • Do you enjoy talking about technology?
  • Are you interested in health and wellness?
  • Are you a “greenie?
  • Are you a “Power Shopper”?
  • Do you like helping others?

Next narrow the field by researching the company’s history

  • How long have they been in business?
  • What is the business background of the owners/founders?
  • Do they manufacture their products?

Manufacturers are preferable to companies that offer “private label” products

  • What is their reputation?
  • Have they had legal problems?
  • Have they ever had compensation plan disputes with their distributors?
  • Have they ever been sued?
  • Have their products hurt any users
  • Have their products killed any users?
  • What is their product return policy?

Anything less than an unconditional satisfaction policy for consumers is unacceptable!

  • Talk with other new distributors
  • Talk with product users
  • Use the products

Take a good look at their compensation plan:

  • How will you get paid?
  • Do you get paid only for selling products? (This is good)
  • Do you get paid for only recruiting? (This is bad!)
  • Getting paid for product sales, only product sales, by your downline organization is the only legal method of compensation
  • How many first level distributors will you need for the maximum pay plan levels?
  • How deep does the pay plan go? (This means on how many levels of distributors below yours you get paid)
  • Test the plan
  • Use a spreadsheet to understand how the plan will work for you.
  • Talk with the person recruiting you about how they get paid, in detail.
  • If they don’t understand it, don’t sign up with them!

Finally, go with your feelings about the company, products, people and, most importantly, is network marketing the right opportunity for you?

Summary

A network marketing business can provide you, and your family, with the kind of lifestyle that you have dreamed about. It is the “Everyperson’s Franchise” that, in today’s stagnant economy, you can use to improve your financial circumstances, build equity and pass along to your heirs. And, you can enjoy the additional benefit of helping others to improve their lives as you improve yours!

But, do the research to make certain that you are joining a reputable company who’s products you will use and one that will stand with you for years to come. You are making a decision that you must be proud of as you build the life of your dreams!

This is why I did the research about ViSalus and become an independent promoter! Contact me to get more information. Cell: 810.908.3700 Email: Lucas@Lucas WorldWide.net

About the Author

Lucas Tyler Schunot is dedicated to offering secure, entrepreneurial career alternatives for motivated people. Create a financially secure, abundant and healthier life for yourself and your family by building a network marketing business rapidly, using the most effective online marketing strategies available. 


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