ARTICLE 1: WHAT IS NETWORK MARKETING?

It is a relationship business; it is about helping people build a business or focusing on your customers for your products and services. Network Marketing really is an unseen business and it is all about sales.

It is businesses in which anyone can invest a small sum of money and through sheer tenacity achieve staggering levels of financial reward and personal freedom. But it requires education based on market tested results.

Network Marketing 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 in the network marketing / direct selling industry.

The Network Marketing / MLM industry has a very shady reputation. Many of the people you will talk to feel it is a scam.

Are they justified in this opinion? In many ways they are justified, but you can make a difference with the way you market your business.

In the 1950's when Franchise’s first emerged they where labeled a scam, illegal etc.

Fortunately a franchise is not labeled as such anymore or quite possibly you would not be enjoying your favorite hamburger today.

Let’s look at the two types of business models that you could be involved in or approached with:

Network marketing / Multi-level marketing (MLM)
They usually 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 and that is residual income.

It costs much less to get involved with this form of business, a few hundred dollars.
Allows more people to become involved.
Builds Residual Income.
Leverages the time of others.

Network marketing is all about sales and distribution, but a different kind of sales. It’s more of a soft sale or recommendation then the hard closing type that you’re accustomed to with the typical salesman or saleswoman in the direct sales.

The best approach by far in network marketing is a consultative sales approach. This is used very successfully today.

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 but 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, so 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.

Direct sales cost more to get involved with usually in the thousands of dollar range, again limiting you on the number of people!

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, and they can produce a residual income if it is a service based product.

It is vitally important to understand aspects of a network marketing company, compensation plans, training, products, services, before you actually pick a company that is right for you.

When you first get start looking at a network marketing business you really need to have the mindset that you are starting school "A" business school. You need to tap into training from day one. There is so much you will have to learn that at times you will feel completely overwhelmed.

If you stop to think of it as a giant puzzle with so many pieces that have to fit together properly you will be on the road to success. Through out our life, the school systems have taught each of us to be a good employee.

Our college system has taught us to be a good manager. We have never really been taught how to successfully run our own business.

What we really need to do at this point is unlearn everything that we’ve been taught. The employee mindset is to do as little work as possible.

As a small business owner, if you’re not willing to go the extra mile in both time and money, then it is time to start thinking about doing something else in life.

Network marketing, should be about gathering customers and business partners, yet most of the companies today only teach you to recruit and get everyone on the product.

You can build a very successful business with only a handful of representatives in your organization if they are taught to gather customers along with others who show a genuine interest in building a business.

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