What is Network Marketing?
Network marketing is when a product or company spreads through word of mouth. It is almost something that we do naturally everyday - 'have a read of this great book' or 'have you seen my dress from *********?' It is simply marketing through your network of friends or family. It is beneficial to them, as you are not exactly going to recommend a product that you think is pretty rubbish!
In network marketing companies, people who are consultants or affiliates of a business will often receive a percentage of sales made through their network. In other words, if your friend becomes a shopper on website because of you, and you represent that company as a consultant, you will recieve money for their orders.
Many of these marketing companies are set up so that you can also recruit a team, which is good because they will go on to spread the company or business through word of mouth too, and you can also benefit from this.
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What is wrong with Network Marketing or MLM?
MLM (Multi Level Marketing) or network marketing has been criticised for exploiting those at the 'bottom of the pile', so to speak. This is because when you develop a team in network marketing, you can benefit from 'compounding'. This means that you don't just benefit from those you recruit, you benefit from everyone in their downline. Some people have a problem with this, because ethically, it could imply that those at the bottom can never earn as much as those at the top.
However, think about the workplace - there are those at the bottom and those at the top. In many companies, it is often extremely hard to work your way up to the top - oh, it's a pyramid! The difference with network marketing is that you can end up earning more than your sponsor if the product is good and you put in the effort. For relatively new cmpanies, there are enough people in the world for everyone to benefit.
The negative opinions about network marketing often come from people who have bad experiences with Ponzi and 'pyramid' investment and pyramid schemes of the 80's and 90's. Many 'Ponzi' schemes or 'pyramid schemes' involved the need to recruit new people who pay into the scheme. In fact, with pyramid investment schemes, there was never any new wealth created, it was just being passed from those at the bottom to those at the top.
Also, many negative views come from people who have tried it and it hasn't worked for them. But this may be because they chose the wrong company and weren't passionate enough. Or perhaps they just didn't give it enough time or put in the hours, and were surprised when they had sold nothing. Well, of course you won't if you don't talk to people and stick at it! Network marketing is not a get rich quick scheme, if it was - then it probably would be a scam!
With networking companies today, most wealth is created from a product, not from people 'buying in' to a scheme. This means that networking companies today are legitimate. If they were pyramid, or Ponzi schemes, that would be illegial, and they wouldn't be able to operate in the UK.
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What are the Benefits of Network Marketing?
Network marketing can be an extremely social business. If you like chatting and meeting new people, it is definitely the business for you! Sales in network marketing do not have to be forced - they can happen by a conversation in a bar or the gym. Friends and family can often get free samples and may make a lifestyle choice to change to a different product rather than one they were using previously. Network marketing is enjoyable, as long as you are passionate about what the company and the product(s).
Network opportunities provide a great way of setting up your own business, and with very little cost. You often have to pay a small registration fee which will cover the initial paperwork. But after that, you have the freedom to earn as much or as little as you wish, choosing your own hours and when you work them. This can be ideal for work at home mums, and people who find other 9-5 jobs rather restrictive.
By recruiting people into your network or business, you will find that you develop new skills and discover skills that you didn't realise you already had! For example, you may work internationally, training new members of yur team via skype. You could also start to get inolved in giving presentations to a large number of people - something that you may never have considered, or had the opportunity to do before.
There are also endless training opportunities all over the world. Come on, attending conferences in Toronto and Las Vegas can't be that bad! And remember to put these costs through as expenses, as they are necessary for the running of your business.
Earning Potential in Network Marketing
The best thing about this type of marketing is the earning potential that it provides you with. There is no cap on network marking - the sky is the limit.
The more people that you bring into the business, the more you have potential to earn. One of my favourite books is Jordan Adler's Beach Money. He explains how networkd marketing can allow you to earn money sitting on a beach. This is because you will develop a team and train them, allowing you to make use of 'leverage'. Jordan Adler tried several network marketing companies which failed. But now he is a multi-millionaire!
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