Network Marketing, The Business Model

Network marketing is a multi-billion dollar business. As a business model, it is taught in major universities around the world. The Wall Street Journal stated, "…between 50% and 65% of all goods and services sold in this millennium will be through network marketing." It is a business model that is perfectly suited to the "information age."

What is this "Business Model?" Network marketing is a way of doing business that is different from the "traditional" model used by most consumer packaged goods, food and drug companies. It is one of the most promising income opportunities in American today. It is the idea of many people each doing a little work, as opposed to a few people doing a lot of work. To quote J. Paul Getty, the world's first billionaire, "I'd rather have 1% of the efforts of 100 people than 100% of my own."

Rather than using the customary distribution process of moving products from manufacturer to wholesaler to retailer to consumer, network marketing companies use a network of independent marketers to move products directly from the manufacturer to the consumer. Further, the cost structure of a network marketing organization is different than a traditional packaged goods marketer.

With a traditional company, millions of dollars are spent on advertising to entice consumers to buy that company's products instead of the virtually identical product from another company. With a network company, the advertising expense is channeled into sales commissions for distributors who promote the product through "word-of-mouth" advertising, i.e. by telling other people about the product. In the traditional business model, money is spent BEFORE the sale in the form of advertising; in the network marketing model, the money is paid AFTER the sale in the form of commissions. Which model seems to make the most sense from a business standpoint?
Tip! Duplicate yourself. Network marketing is about leveraging yourself, reaching many more people, and selling many more products than you could possibly do on your own.

With network marketing, you have two sources of income: (1) direct commissions from sales you make yourself, and (2) commissions from sales made by people you introduce to the business, called residual income. You can invest your time and money once and get paid multiple times for the effort. It means getting paid for the work of others. In traditional sales, you may be a great salesperson and have a few dozen good customers and earn your income from all their purchases. However, you probably have to nurture these customers and spend most of your working time making sure they are buying from you and not someone else.

In network marketing, you can build a downline of 100, 1,000, or even 10,000 people, most of whom you will not know nor ever have contact with. This is because the majority of the people in your downline will be people who know somebody, who know somebody, who know somebody, who know you. By having a downline that is working with you, and for you, you can multiply your efforts many times. The earning potential of a downline of 1,000 people, each putting in only one hour a day five days a week, represents 20,000 hours of work in a month. It would take one person 10 years to produce the same amount of work. That's the power of a network.
Tip! After giving a complete network marketing presentation to a prospect, you discover that he/she was never qualified to begin with. He was irrational, illogical, unmotivated and didn't have two dimes to rub together.

Perhaps Robert T. Kiyosaki, author of the Rich Dad, Poor Dad series, said it best. "The richest people in the world look for networks. Everyone else looks for work."

It is estimated that more than 50,000 people start a home-based business every week in the United States. The average person owning a home-based business earns more than $50,000 a year (often working part-time), while the national average annual household income is less than $45,000 (and most of those people are working at least 40 hours per week). Additionally, a home-based business owner can qualify for many legitimate tax breaks, and tax experts suggest that the average person can save between $2,000 and $10,000 on taxes every year just by starting a home-based business.
Tip! Take five. Creating a large and successful network marketing team is so fun and rewarding that we sometimes forget to take breaks – and that can lead to burnout.

How is this possible? Well, consider these two tax structures: a wage earner first earns income, then pays tax on that income, and then pays for expenses with after-tax income. A business owner first earns income, then pays for expenses, and then pays tax on net income after expenses. In other words, a business owner can legitimately reduce the amount of tax he or she has to pay because business expenses are paid with pre-tax income, not after-tax, income.

Network marketing is a $36 Billion industry in the United States. More than 20 per cent of the estimated one million millionaires in America today have earned their fortunes over the previous six years through network marketing. Worldwide, there are over 3.5 million millionaires, and more than 700,000 have made their millions via network marketing. Conservative estimates are that network marketing in America is creating 40 new millionaires every month from average people. This means that a person's greatest chance of financial success is through "networking." Again, Robert Kiyosaki observed, "If I had it to do all over again, I would choose network marketing."
Tip! Create a large customer base. This is another largely ignored, yet very important, piece of your network marketing business.

For people who are interested in starting a home-based business, supplementing their income, and providing greater security for retirement and for their children and grandchildren, network marketing is an obvious choice.

Bruce Bailey, Ph.D.

Dr. Bailey has transformed the incomes of scores of MLMers. His never-miss tactics have been used by thousands to turn their MLM dreams into realities! For FREE access to his e-course, visit http://www.myidealmlm.com

The Ebb and Flow of Network MarketingThe Ebb and Flow of Network Marketing

"And so I say to you: ‘Ask, and you will receive; SEEK, and you will find; knock, and the door will be opened to you.' "For everyone who asks will receive, and he who SEEKS will find, and the door will be opened to anyone who knocks." - Luke 11: 9-10. [Good News Bible]

No matter how long you've been in this business, you will have experienced what I call the "Ebb and Flow of Network Marketing." It's simply the highs and lows you experience from dealing with people. We have all experienced it, even the top earners in the business.

See if this has happened to you. You've just made a great presentation to a prospect and, in spite of your being able to neutralize every objection they have put forward, they still don't sign up. You feel rejected, frustrated, and disappointed. You begin to wonder why you ever got into this business and what you're doing wrong. You go into a bit of a "funk," and start to feel sorry for yourself.

After a bit of a lull, you decide to try another presentation to another prospect. This time, they're ready to sign up almost before you open your mouth. You're on Cloud 9, you can move mountains, you are master of your domain!

What has happened? You've just experienced the "Ebb and Flow of Network Marketing."

Every MLM distributor goes through it. This emotional ebb and flow is often what stops many network marketers from achieving the financial freedom and security they desire. They let their emotions control how much work they put into the business, and a few "no's" cause their efforts to diminish. Consequently, their business grinds to a halt.

Successful networkers, however, adopt a posture of emotional equilibrium, not getting too "high" with each success or too "low" with each failure. In his CD series, "Key to the Vault" (which I highly recommend to any network marketer), Bob Schmidt tells the story of John Wooden, the legendary coach of the UCLA basketball program, who won 10 national championships in a 12-year span. Wooden wanted his players to achieve a level of emotional maturity, or equilibrium, regarding their performance on the court. He wanted his players to behave in such a way that, after a game, a locker room observer would not be able to tell whether the team had won or lost. Wooden stressed to his players that if they had simply gone out and done their best, the outcome was not the issue. Therefore, being high on victory or low on defeat never entered into the equation. That's what he meant by emotional equilibrium.
Tip! Look for a company that has been around and proven itself. Someone who has been in network marketing and has experience might take a chance on a new company, but a novice should be more careful.

Remember the acronym S.E.E.K. - Seek Emotional Equilibrium Knowingly

Learn to control your emotions; don't let them control you. If a prospect's failure to sign up with you causes you to go into an emotional tailspin, you have lost control of the situation. Because your business depends on you, you are letting your prospect control your business. This is equally true for a prospect that does sign up. If you get too high on that success, and base you next actions on what the prospect has done, you have again let them take control of your business.

Don't let your mood, your emotional state, control your efforts. S.E.E.K., and you will find the path to achieving the success you desire.
Tip! Some companies think that Business Cards are the answer. Most beginners in Network marketing buy expensive cards with their company log on and start distributing them.

Bruce Bailey, Ph.D.

Dr. Bailey has transformed the incomes of scores of MLMers. His never-miss tactics have been used by thousands to turn their MLM dreams into realities!

For FREE access to his e-course, visit http://www.myidealmlm.com