With a downward global economy, many people have to find ways to supplement or even replace their income to support their families and make the “ends meet”. A large number are seeing network marketing as the vehicle to reach that destination. Through no fault of their own, many find themselves facing job loss; reduction of hours worked, and end of unemployment compensation. Even where one or two incomes provided enough financial means many are now seeing that that is no longer the case. Network marketing can provide an answer to their financial difficulties. Network marketing has the ability to provide freedom from financial stress, freedom to change employment (underpaid, undervalued, and unmet expectations). Gaining the opportunity to spend more quality time with their families is another benefit.
So, precisely is Network Marketing anyway?
Network Marketing, more commonly known as direct marketing, is a marketing system designed to provide compensation to the individuals who are successfully promoting the company products from their personal sales but, also from the sales of others that they introduced to the company. By sharing the company with other people, they create a downstream of distributors and a hierarchy of compensation. The business opportunity is shared with potential business partners and products are sold directly to consumers. Both are accomplished through referrals and word of mouth marketing.
Each of us tend to refer business through word of mouth relationships on a daily basis. The difference is that we do not get paid when we recommend something. For instance, you go to the movies and really liked the movie. So the first thing you do is tell your friends who then go to the see the movie. The same scenario can take place by visiting a store, restaurant, etc. These are all relationship word of mouth advertising. This form of business promotion allows the company limit what they have to pay for advertising like television, radio or newspaper ads, which can be very costly. Rather than spending the money on advertising the product, it stays with the company.
In a network marketing company you, the referrer, are compensated for your efforts.
Almost all direct sales companies consist of self employed independent representatives who are known as associates or distributors who represent the company’s goods or services they provide. They receive commissions from the volume of products / services sold through their own sales efforts and that of those in their downline.
The independent distributor expands their businesses by developing an active client base that purchases retail directly from the distributor or by other sponsored independent distributors who do the same.
Network marketing provides the individual the ability to leverage time in their favor. By increasing the total number of hours of work effort on which they can be paid by sponsoring other people and then earning a small commission from their efforts. The concept behind this leverage is a person earning 1 percent on the efforts of 100 people will earn more than earning 100 percent from their own efforts.
Most network marketers sponsor other people and teach these people how to sell the company product and sponsor others. This is a duplicatable process and is repeated by those they sponsor. Someone is using their time helping others to succeed and earn income from their efforts. Compounding occurs as this cycle continues and large growth can create an organization of hundreds or even thousands of people in your downline.
Is network marketing a legitimate business model?
Yes, as long as it provides people real products at non-inflated prices that they want and need.
What it is NOT – is a “get rich quick” scam.
Network marketing, for many, may be the solution that they are looking for to supplement or even replace their income. With all business ventures you will only reach your dreams and goals if you have the discipline to build your business one step at a time.
