What is Network Marketing? (written November, 1993)
Before you can be successful, you have to understand what it is! Simply put Network Marketing is just another business method of moving products and services from manufacturers to consumers – but with a twist. The twist is that it lets people like you and me in on the profits!
Network Marketing – first let’s look at why more and more manufacturers, including Fortune 500 companies are starting to embrace Network Marketing. Obviously manufacturers want to get their products into the hands of as many people as possible and as quickly as possible.
In conventional marketing, however, this may require millions of dollars of ongoing advertising expenses. It will also probably require going through layers of middlemen (jobbers, wholesalers, retailers, etc.) – each who want their cut of the profits (while adding zero value to the product or service). In addition the competition can be fierce. And even after spending millions, there’s no guarantee of success. Now consider Network Marketing. In Network Marketing, the manufacturer introduces his product in the form of a business opportunity, much like a franchise, to a small nucleus of independent business people. The company will produce and supply the products at wholesale; provide the necessary promotional and sale materials; handle data processing and accounting; and even help in training.
This nucleus of people then introduce the products and business opportunity to others, who, in turn, introduce it to even more people. And so it continues – with the base of consumers and independent distributors growing larger every year. This partnership of the Network Marketing Company and its independent distributors is of course mutually beneficial. The company slashes huge amounts of cash from its distribution and sales costs. The company doesn’t have to advertise anymore either because its distributors do it for them – often just through “word of mouth.” and where do all the million of dollars go? To the distributors of course in the form of commissions and overrides. But in contrast to conventional marketing, the company now only pays for results: i.e., commissions and overrides are paid out only when products or services are sold. But since each individual can only personally move a small amount of product, Network Marketing companies also allow you to sponsor other people into the business and earn override commissions on their efforts too. This is one of the most powerful advantages that Network Marketing has over other traditional, direct-selling methods. You see, success in conventional direct selling usually means you have to be a super salesman and retail huge amounts of product. Network Marketing is just the opposite. Success in Network Marketing is about a lot of people each doing a little.
Also unlike most traditional direct selling, Network Marketing isn’t a job. On the contrary, it’s your own business to run as you like. And no matter when you join a Network Marketing organization, you start out as and will always be the head of your own company. You’ll build your own network of independent distributors and earn a percentage of the sales. Yet each is a CEO in their own right, as you are, and each with the opportunity to build their own moneymaking networks under them.
Do you know what happens when you double a penny every day for a month? At the 15-day mark, it’s grown to only $163.84. But by the 30th day, it’s mushroomed to over 5 million dollars! This duplication effect is the most powerful ingredient of Network Marketing. It’s also the reason why Network Marketing is creating financial freedom for thousands of people worldwide today. Imagine that you’ve shared your Network Marketing opportunity with John in Texas. John has an associate in Ohio by the name of Mark. Mark comes aboard and soon shares the opportunity with Jean from New York. Through Jean’s efforts, a Californian, Rita joins the network. By just sponsoring one person, you’ve set into motion a chain of events that now has people working indirectly on your behalf across the United States! And every person (John, Mark, Jean and Rita) is each adding to your commission check! This is just one very small example of duplication and networking in action.
Do you think you can find one person each month to join your business? Just one person a month who might be interested in financial freedom, more leisure time, more security and more happiness? Do you think you can teach that one person a month to do what you do? If you can, you can become wildly successful in Network Marketing! But you know what? Even if you’re only able to sponsor someone every 3-4 months, full-time incomes are still possible. And that’s after just your first year. Consider what you can do in a year two, year three, and beyond!
The author of this article is Larry Costello, President of All-American Print & Mail, 2200 Wilson Blvd #102-57, Arlington, VA 22201.