“The richest people in the world look for and build networks while, the rest look for work.’’– Robert kiyosaki.
THE COMMON MISCONCEPTION OF MLM/NETWORK MARKETING.
ISN’T MLM/NETOWRK MARKETING a PYRAMID SCHEME?
To understand MLM, we must first understand PYRAMIDS. Corporations are really pyramid structured. Governments, institutions, organizations, family all have a pyramid structure. A corporation has only one person at the top, generally the CEO, and everyone else below.
A true MLM business is the exact opposite of a traditional business model. Network marketing business is designed to bring you up to the top, not to keep you down at the bottom. A true MLM company does not succeed unless it brings people up to the top. So the question people should be asking is, is it a pyramid that keeps you down at the bottom or one that brings you up to the top? Failure to acknowledge this difference will lead you to fail miserably and lose everything including your friends. I think if we knew better, we will do better!
MLM. “Direct Selling is ideal for products that require more demonstration or explanation than provided in retail stores. It is also an attractive channel for suppliers who can’t compete for space on retails stores.”
Pyramid Scheme (“PS”)
“A Pyramid Scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered’’.
WHAT MLM/NETWORK MARKETING IS NOT
Network Marketing is not a pyramiding scam.
The only similarity between legitimate network marketing and a pyramiding scam is that both offer an incentive for one to introduce another to the business. Pyramiding scams are companies where depends on recruiting, without products. MLM Company can be a legitimate pyramid where distributors get points from selling. There are products involved.
Network Marketing is not a get-rich-quick-scheme.
On the contrary, it is a slow business at the start and the momentum begins to climb only upon recruitment and activation of the third and succeeding levels, as downlines are motivated having their own recruits. Simply, recruiting derives no income. Members of the network must retail product before they and their sponsor (or uplines) can earn.
Get rich-quick-schemes involve those selling products at inflated prices or those without fair market value. For instance, let’s say you have been asked to buy a product for $100.00 when the fair market available elsewhere for the same product is only $60 plus. To give you the impression of being given a favor by a caring company, you would be even offered a lay-away plan of $40 down payment and balance payable in 12 months. The company would then claim that what they are selling is not only the product but also the business opportunity. The reason given why the product becomes much more expensive is the commission payout to people.
No Selling Involved
These familiar words can be seen in some print ads or heard in meetings put up by people who think they understand the network marketing business. They assume that people who sign up will all like the product value offered and continuously do repeat purchase. It is a variation of get-rich-quick-scheme. Some people choose to believe the no selling offer against their better judgment only to experience great disappointment when the promised income fails to materialize.
Network Marketing involves retailing and building a customer base. While selling to one’s self for personal consumption comprises part of what can be generally accepted as “retailing”, network marketing firms usually require some level of personal sales volume for the network marketer to earn from the sales of their recruits. This ensures leadership by example, which is how the business of managing downlines is actually run.
Early Retirement Money
Income in Network Marketing is based on activation of downlines plus the required monthly personal and/or group sales to keep in touch with the business. Leadership by example in network marketing means “do as I do, not do as I say”, so if the upline will slow down prematurely, the downlines will also think of the same and most of them, if not the whole network, will collapse in no time.
What is Network Marketing?
Network Marketing is a type of direct selling where distributors are compensated in both selling the products and the business opportunity. This encourages them to build and maintain their own networks of distributors, each with their own customers. It comes with many aliases: MLM, Multilevel Marketing, Word of Mouth Marketing, and Multiplication-of-Efforts marketing, among others.
The distributors, who are independent contractors and not employees of the company, act as both the company’s product (or services) and business opportunity. They are compensated in two (2) ways:
1. When they sell products
2. When their recruits sell products.
Network Marketing allows Individual sales person to:
… Sell products and earn
… Sponsor, train and manage other sales persons and
… Earn commissions from the sales of their business partners.
Network Marketing Involves…
1. Personal Use of Products.
2. Retailing of Products.
3. Building and Managing a Sales Organization.
How does Network Marketing work?
Network Marketing is somewhat like franchising. In Fact, it is sometimes describes as “The People’s Franchise”. Both give the right to do business with the use of the company’s name and the use of an established or duplicable system of doing business except network marketing does not require distributors to pay for expensive and upfront franchise fees. There are three basic components in seeking viable and sustainable network marketing:
Quality of Product value is the ability of a product to satisfy customer’s needs and wants in relation to the price it is offered. It is needed to ensure business sustainability.
Quality of Company refers to the ability and commitment of a firm to stay and grow in its market place in good times and bad; this includes how they manage the administrative support and customer service aspects of the business and with a great training program capable of turning caterpillars into butterflies, equipping distributors with leadership skills thus your personal development.
Quality of Compensation Plan refers to the financial payout that can influence existing and potential distributors to the retailing and sponsoring behaviors desired by a network marketing company.With the presence of these three factors, a network marketing distributor must offer 3 initiatives to match or maximize the business opportunity offered by the company. These are:
Quality of Prospect is divided into retail prospects and business opportunity prospects. Quality retail prospects refer to qualified long-term buyers of the products, while quality business opportunity prospects refer to the individuals who can and will continuously sponsor new recruits and help them become active sales leaders.
Quality of Effort and Time refers to the amount and level of relevant training and support an upline gives his downlines. Since vision dictates behavior, the quality of the uplines effort and time spent with recruits will depend on the size of their vision.
Quality of Leadership, refers to the critical role an upline consistently plays to build, nurture and sustain relationships with his downlines and fellow distributors. Leadership starts with mastery of one’s self. It is about having a compelling vision, being committed to that vision, then articulating effectively selling this vision to downlines. It is about making plans and adequate preparation in support of the vision, and it is about doing the task required to make the vision a reality.
Attaining high quality prospects, high quality effort and time, as well as high quality leadership continuously, consistently and cheerfully will differentiate the successful network marketing distributor from the mediocre.
3 Rewards of Network Marketing:
Network Marketing opportunity revolves around three (3) areas of rewards
Distributors are paid not only from their personal sales but also from the sales of their downlines upon reaching a qualifying rank and/ or volume. It allows distributors to leverage on the efforts, time, money, and skills of others to effectively build their business and increase their income potential. It is the secret to success in MLM/network marketing.
2. Geometric Growth
If each of the 5 people you sponsor would sponsor their own 5 serious- minded distributors, you would have 25 people on your second level, 125 on your third, 625 on your fourth, 3125 on your fifth (5th). This number can expand geometrically as the levels go deeper. Can you imagine, if the distributor will earn $5 from each of them monthly? To maximize the benefits of network marketing compensation plan, a distributor must commit to stay and do the “width” (personal recruits) and “depth” (helping personal recruits sponsor personal recruits) required in the business for at least a year. Geometric nature of network marketing allows you to expand your business to other parts of the world or other countries like I have done.
3. Residual Income
Network Marketing distributors have the opportunity to earn residual income from the repeat sales of their customers as well as that of their downlines when they maximize their repeat sales potential as well as minimize the fallout rate of their downlines. After you have build your sales organization with repeat sales, it will continue to pay you lifetime and you can will the business to family. There are many unique benefits the network marketing industry offers to those who want more out of their lives.
World renowned businessmen and investors endorsed network marketing as the business of the 21st century for anyone looking to build a business they can call their own. Network marketing meets several criteria to look for in a business or investment.
Leverage; can I train others people or combine the efforts of others to get the job done? John Paul Getty said, “I would rather earn 1% of 100 people’s effort than 100% of my own effort’’.
Control; do I have a protected system that belongs to me?
3. Creativity; will the business allow me to be creative, and develop my own personal style and talents?
4. Expandability; can my business grow indefinitely?
5. Predictability; is my income predictable if I do what is expected of me? If I am successful, and keep expanding my business, will my income increase with my success and hard work?
“When I first heard about network marketing, I was against it. But after opening my mind, I began to see advantages that few other business opportunities offer’’. – Robert Kiyosaki.
I suggest you keep an open mind to learn more about network marketing and you will discover the greatest opportunity for financial success.
Is a fact that we have a better way!!