Network marketing
What is network marketing?
Direct sales vs network marketing
Is it selling?
What is a pyramid?
Facts about network marketing
Myths about network marketing
What is wealth?
Four key ideas for creating wealth
Different types of income
Business opportunities
Books & articles
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What is Network Marketing?
- Network marketing is also known as Multi-Level Marketing (MLM).
- It is a form of franchising based on the concept of word of mouth advertising. For example, what if you watch "Jurassic Park", you like the movie and you recommend it to your friends, who in turn tell their friends. At the end of the week or month, Walt Disney paid you a commission based on the number of people who paid to watch the show because of your recommendation! Wouldn't that be great?
- Companies such as Walt Disney paid advertisers millions of dollars in advertising money. Network Marketing companies on the other hand, take this sum of money and instead of paying to advertising companies, pay this sum of money to independent distributors who help them to advertise via "Word of Mouth"!
- Would you agree that franchises like MacDonald's and Kentucky Fried Chicken are hugely successful? The reason is that they are duplicating a successful system. But flash back to the early years and it was labelled as a scam!
- Similarly Network Marketing uses the concept of franchising to let ordinary, common folks to run their own business with an easily duplicatable system but at a fraction of the capital investment and with minimal risk! Minimal risk because of the low capital investment required.
- Network Marketing has been labelled by the National University of Singapore's Graduate Society as "The Wave of the Future"! Companies like IBM, AT&T, Colgate Palmolive & even Singapore's biggest local bank DBS, use network marketing to distribute their products!
- In the US, Network Marketing is a US$106 billion turnover industry with a growth rate of 25%!
- Consider the following: in the past 7 years, in US, 64,000 millionaires achieved their fortune through Network Marketing! The growth rate is estimated at 20%.
Direct Sales vs Network Marketing
What are the fundamental differences between Direct Sales & Network Marketing?
- In Direct Sales, the model is based on a few people doing a lot. In Network Marketing, it's exactly the opposite; a lot of people doing a little bit each.
- Imagine that you have a product and you want to sell $1,000,000 worth over the course of one year. In the conventional Direct Selling model, you might hire a sales force of 100 people and impose a sales quota of $10,000 per person.
100 x $10,000 ?$1,000,000
- In Network Marketing, we simply reverse the numbers to achieve the same result. Here, we have 10,000 people, all responsible for only $100 each!
10,000 x $100 ?$1,000,000
- This is exactly what J. Paul Getty was talking about when he said, "I'd rather earn one percent off the efforts of 100, than 100 percent off the efforts of one."
Is it Selling?
- Now, you may be thinking, "Well, I still don't want to sell anything? I'm not good at sales."
- Great! This is where a powerful segment of the opportunity comes in. You're already doing it; you're just not getting paid. Would you like to see how you could now get paid for what you're already doing?
- You're Already an Expert!
- "How is that possible?" you may ask. Have you ever recommended a movie, book, restaurant or anything else to a friend, co-worker or family member? Of course you have - we do this all the time. If someone took you up on your recommendation and actually enjoyed the movie, do you think it's likely that they recommended it to someone else? Of course-this kind of word-of-mouth recommendation occurs every day.
- Now, let me ask you an intriguing question. You paid to see the movie and the people you recommended it to also paid when they attended the movie, right? Furthermore, the person they told about the movie paid to see it as well! Now, did you get a check from the theater thanking you for the referral? NO! Did the person you recommended the movie to get a check? Did the person they told get paid? Of course NOT!
- The only persons who got paid here was the theater owner and Walt Disney while you did the advertising for them. How would it be if you got paid for every recommendation you made and so did those you told? That's the beauty of Network Marketing.
- You, and those you tell, all get paid for doing what you're already doing.
What is a pyramid?
- It is an organizational structure where the people at the top make more money than those beneath them. This describes every conventional company in existence! The problem with the conventional company is this: there exists a structure whereby the CEO generates income from the efforts of each person below, but those workers do not have the opportunity to earn as much as, or more than, the CEO.
- Have you ever heard of a general worker [GW] who makes more than the CEO or the General Manager [GM]? Does middle management ever make more than the company's senior management does? Not typically! The old model just isn't fair for those underneath. No matter what their effort, they can never make more than those above them can. The pyramid is not equitable.
- In Network Marketing however, you are building an income from the production of everyone in your organization whether you directly sponsored [a sponsor is one who recruits and trains another distributor.] them or not. Each person in your organization can do the same, so now you have created a situation where everyone has the same amount to gain. It's the fairest structure available because everyone can create exactly the same situation. And in fact, due to the nature of Network Marketing, people under you can and do in some cases, earn more than you simply because they can access levels that you cannot. Everyone can reach down into their organization the exact same number of levels. If someone has created more volume in their levels than you have in yours, and some of those levels are beyond your ability to reach them, that person can actually make more than you can, even though they are UNDER you!
- This makes it the absolute FAIREST system available because it compensates people based on their contributions and efforts, not based on where they fall in the system. Once again, why should someone earn as much as you if they're not making the same effort that you are?
- IT REALLY WORKS!
Facts about network marketing
- Network Marketing is a method of distribution and compensation that has been utilized in the United States for over 50 years and which is now spreading across the world. The Direct Selling Association (DSA), based in Washington, DC, represents the Network Marketing industry. The DSA has existed for more than 100 years.
- There are in excess of 1,000 Network Marketing firms that distribute over $100 billion a year in goods and services. It is estimated that eight to ten million Americans are either part-time or full-time distributors. Tens of millions more are customers.
Myths about network marketing
- Network Marketing does not work. The big guys make all the money off the little guys.
- Well, Network Marketing DOES work. What usually does not work is a particular company, product or distributor. You must decide for yourself whether you work or your chosen company works or the product works.
- Let's consider the concept of big guys versus little guys. Usually the people who perpetuate this myth are those who define fairness in terms of everyone receiving the same benefits regardless of their contribution or effort.
- In Network Marketing, the people who attract, train and motivate the most people earn the most money. If you sell/consume $100 worth of product yourself each month, plus you build an organization of 100 people who do the same, you will earn a great deal more-100 times more, to be exact-than the person who only sells/consumes $100 per month. Now, that's fairness! Why should someone earn as much as you if they're not making the same effort that you are?
What is wealth?
Wealth means different things to different people. For some people, wealth could mean big cars, big houses and anything that makes you look and feel good. For some it could mean long term financial security.
Robert Kiyosaki, author of Rich Dad, Poor Dad, a New York Times bestseller, defined it as "the number of days that you can survive forward if you stop work tomorrow". Think about that for a second. How many days can you survive forward if you stop working tomorrow. What would your answer be?
Whatever your answer, would you agree with me that true wealth is when you can say that "if I stop work tomorrow, I can survive forever and the money will come somewhere, somehow and I do not have to work for the rest of my life"?
TIME IS OUR MOST SCARCE RESOURCE. It has been said that TIME is LIFE and LIFE is TIME. When we leverage our time to create wealth, we are actually maximizing our life to create wealth for ourselves.
Ask yourself: "If I continue to do what I am doing now, will I acquire true wealth?" Some of you may say "yes" but for many, the answer will be "NO". The greatest insanity, is to do the same thing everyday and expect different results. If we want a change in our life, we must change our life.
Statistic tell us that by the time we reach 65 years of age, 36% of the people will be dead, 54% will need to depend on others to survive, 5% still have to work for a living, only 4% are able to be financially independent but only 1% will achieve their dreams to be rich and wealthy.
Four key ideas for creating wealth
Different types of income
- Linear Income - here you exchange your time for money. The more money you want to earn, the more time you need to give up. Examples include salaried workers. If you stop working, your income also stops.
- Residual Income - here you do the work once and get paid for eg. by earning royalties. Examples include writers, singers.
- Multiplex Income - this is income earned by leveraging. Consider the McDonald franchise concept. Ray Kroc did not become a millionaire by selling hamburgers. He had independent business owners who bought a franchise from him. They sell the hamburgers for him and each pay him a franchise fee and also a percentage of sales. What Ray has is a proven system. A system that can be duplicated. Multiplex income is based on the concept of "the power of duplication". Examples include franchising & Network Marketing.
Business opportunities
Before embarking on any business venture, it is imperative to recognize emerging trends and capitalise on them. There are 3 trends that present tremendous growth opportunity for everyone of us, right now and that is the trend of network marketing (also known as The Wave of The Future), internet marketing and health food industries.
- Tahitian Noni International
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Tahitian Noni Juice™ is endorsed by noni experts, doctors and scientists.
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Ranked 26th on Inc 500 List (Oct 30, 2001), Morinda is one of only 22 companies on the list to break $100 million in sales and the highest-ranking network marketing and health products company.
More about Tahitian Noni International
- Make Your Site Sell!
The Make Your Site Sell! 2002 book puts you on the cutting edge of selling on the Web. The Sales from the EDGE e-zine keeps you there. The EDGE features comprehensive reports on how to take maximal advantage of important new Web marketing and sales developments.
More about Make Your Site Sell!
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"Network Marketing gives people a creative opportunity to set up their own business & improve themselves."
- Stephen R. Covey, author of bestseller "The 7 Habits of Highly Effective People"
"Network Marketing has taken the concept of franchising - providing independent entrepreneurs with a ready-made, low risk, proven, turn-key small business opportunity - and made some remarkable improvements on it."
- John Milton Fogg, author of "The Greatest Networker in the World"
"Network Marketing is for entrepreneurs. Business people, but business people with a vision and a sense of adventure. If you're tired of memos, committee meetings and not being able to use your ideas, then you'll find this business to be a refreshing, rejuvenating tonic to your career."
- Randy Gage, How to Build a Multi-Level Money Machine (Prime Concepts Group, 2001)
"Network Marketing powerfully combines all the income-building benefits of being both a "franchisee" and a "franchise company" at the same time - while cutting out the major stumbling blocks of both."
- John Milton Fogg, author of "The Greatest Networker in the World"
"Make the time today to check out the benefits of buliding your own Network Marketing business. It's straightforward and simple, low-risk investment - and it promises to return the most remarkable rewards you can imagine."
- John Milton Fogg, author of "The Greatest Networker in the World"
"As the traditional workforce shrinks, the contingent workforce - those people working on contract, with flexible or part-time hours - grows at an ever accelerating pace."
- Richard Poe, author of "Wave 4, Network Marketing in the 21st Century"
"Unfortunately, few federal and state regulators truly understand multilevel marketing. Just the fact that our organizations are thought of as being pyramidal in shape is a classic example. Our organizations are in fact diamond-shaped, where the levels with the most distributors are always somewhere in the middle. The typical coporate structure is a perfect pyramid...And yes, the hierarchy of the state and federal government is shaped like a pyramid! Multilevel marketing is actually the only form of business that does not form a pyramid!
- Leonard Clements, Inside Network Marketing (Prima Pub, 2000)
"...MLM's influence is being felt universally through the business world, from Wall Street to Main Street."
- Richard Poe, author of "Wave 4, Network Marketing in the 21st Century"
"The future is very bright for the network marketing industry."
- Robert Kiyosaki, author of "Rich Dad, Poor Dad"
"The network marketing industry offers a ready-made business system to anyone wanting to take control of their financial future."
- Robert Kiyosaki, author of "Rich Dad, Poor Dad"
"The number one reason I recommend a network marketing business is for its system of education."
- Robert Kiyosaki, author of "Rich Dad, Poor Dad"
"In today's information age, especially with the abundance of information sources available in the MLM industry, there is absolutely no excuse for a new distributor to go into an MLM opportunity unaware of the truth. A few simple questions, a couple of phone calls, and a little bit of reading are all someone needs to do to know exactly what will really be expected of him or her, and what to expect from MLM, to be successful.
- Leonard Clements, Inside Network Marketing (Prima Pub, 2000)
"Anytime you see a payout of more than around 60%, and surely if it's more than 70%, there must be one or more of the following catches : (A) Their products are grossly overpriced (compared to their cost to produce), (B) their qualifications are impossible to meet, (C) their bonus value to wholesale ratio is pathetic, (D) their founders have an entrepreneurial death wish, or (E) all of the above."
- Leonard Clements, Inside Network Marketing (Prima Pub, 2000)
"There are two requirements - and only two - to build a big business. They are a dream and the willingness to trade seven to ten hours a week for that dream. You need the dream, because that's the only way you'll find the seven to ten hours. You need the seven to ten hours, because that's how much time the business takes to start."
- Randy Gage, How to Build a Multi-Level Money Machine (Prime Concepts Group, 2001)
"Virtually every person in the world has the ability to create a massive network marketing organization. Yet, most people never will.
- Randy Gage, How to Build a Multi-Level Money Machine (Prime Concepts Group, 2001)
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