Network Marketing » Business Model http://www.enablernetwork.org Fri, 23 Dec 2011 05:59:39 +0000 en hourly 1 http://wordpress.org/?v=3.3 What Is Network Marketing? http://www.enablernetwork.org/what-is-network-marketing-4 http://www.enablernetwork.org/what-is-network-marketing-4#comments Sun, 07 Feb 2010 08:23:11 +0000 admin http://www.enablernetwork.org/?p=356

Network marketing is a low-overhead, home based business that can actually offer many of the tax advantages associated with owning your own business. It is a system for distributing goods and services through networks of thousands of independent salespeople, or distributors. It is one of the few businesses that does not require employees, yet enables the owner to leverage his or her time by building a network of independent business people and is probably the easiest way to create passive wealth from nothing. Network Marketing is a legitimate business not a get rich quick scheme. Network marketing success involves developing and keeping a good business relationship with those you recruit in the business a good business.

Network marketing as a business model has been around for a long time, but only recently has it started to gain traction as the marketing model of the future with powerful endorsements from Kiyosaki, Trump, and Allen, not to mention the thousands of major corporations that are using network marketing principles in their affiliate programs. This type of marketing started in the USA and some of the longest-standing companies using this method include Amway, Ann Summers and Kleeneze.

Why Network Marketing is Popular?

One reason why so many people of all ages are interested in network marketing is the Internet. Though network marketing is an old concept it has got a real boost by the development of Internet. Thanks to the Internet now it is possible to build a worldwide business of your own in a very short period of time. The Internet allows network marketers to connect with people who are actually looking to start a business from home. However, Internet based network marketing can be as daunting to the beginner as to the more experienced in business, especially when considering the size and power of the Internet. The secret to success in Internet based network marketing is a simple duplicable system that anyone can follow.

The Internet now enables network marketers to build national and international businesses from the comfort of their home. The combination of the Internet with network marketing provides a Tidal Wave of opportunity for those perceptive enough to get involved. Most internet businesses that people become involved in these days are actually home based Internet businesses that require a strong network marketing component for success.

Benefits for Joining a Network Marketing Company

Joining a network marketing program means giving yourself the liberty to pursue your dreams. Whether you are someone who wants to work part-time in the evenings or at weekends, or someone who wants a brand new full-time career, network marketing is something you can always fit into your personal lifestyle. A network marketing business opportunity is a chance to work from home while making a decent living wage. Once you build your Network Marketing team, you could go on holiday and know that you are still earning cash that is growing.

]]> http://www.enablernetwork.org/what-is-network-marketing-4/feed 0 What is MLM and Network Marketing – An Overview of a Powerful Home Business Model http://www.enablernetwork.org/what-is-mlm-and-network-marketing-an-overview-of-a-powerful-home-business-model http://www.enablernetwork.org/what-is-mlm-and-network-marketing-an-overview-of-a-powerful-home-business-model#comments Sun, 07 Feb 2010 05:48:22 +0000 admin http://www.enablernetwork.org/?p=354 Have you heard of MLM or network marketing? MLM, or network marketing, can be a powerful home based business vehicle, but it is not generally well understood. It is fraught with misconception and an often tainted reputation on the part of the general public.

If you have heard of MLM or network marketing before, do you think of it in positive terms or do you have a negative perception of the industry? When you hear someone such as Donald Trump, or Robert Kiyosaki, or Jim Rohn suggest network marketing is a terrific home based business vehicle for the average person, what reaction do you have? Which side of the fence are you on and more importantly, why?

If you already participate in network marketing, do you sometimes feel embarrassed to admit it? What is it about your beliefs around network marketing that lead you to have these feelings?

In this article, you’re going to get the straight goods about MLM and network marketing as an industry, how it evolved, and where some of the misconceptions came from. That will allow you to put the feelings or perceptions you have about the network marketing industry into some context, from which you can assess whether or not your feelings and perceptions are valid

Modern MLM and Network Marketing

MLM and network marketing is huge. It is a +$100 billion dollar per year industry which offers an accessible way for the average person to launch a legitimate business with the potential of generating very substantial income. It affords you the opportunity to launch a business on a part-time basis, and grow that into a full-time (or more) income. And it requires the least amount of start-up capital and ongoing operating expense of virtually any legitimate business model.

Paul Zane Pilzer, a world renowned economist and college professor, goes so far as to predict that over 10 million new millionaires will be created through network marketing over the next 10 years.
If this is true, why on earth would you feel ashamed or embarrassed to be part of this industry?
Well, as I’ve already hinted, there’s a lot of history behind network marketing.

The Early History Of Network Marketing

Network Marketing as a means of product distribution – which is really all that it is – has been around literally forever.

You can go back through history and the establishment of trade routes and find examples of traders who distributed goods, food, and fur, face-to-face, on behalf of various backers. For example, the Voyageurs established fur trading routes and posts on behalf of the Hudson Bay Company. The Hudson Bay Company itself relied upon the influence of Prince Rupert, who was the cousin of King Charles II, to acquire the Royal Charter which, in May, 1670 granted the lands of the Hudson Bay watershed to “the Governor and Company of Adventurers of England trading into Hudson Bay.”

In New England, in the mid 1700′s, began the phenomenon of the Yankee Peddler, in which peddlers would travel in their cart home to home throughout the countryside, selling their wares.

From there evolved the concept of the door-to-door salesman. The Watkins Company was launched in 1868, selling a popular liniment. The late 1800s saw the spawning of new companies employing door-to-door salesmen to distribute bibles, books, spices, remedies, perfumes, tonics and the like. The California Perfume Company, which later became better known as Avon, was founded in the late 1800s.

The Fuller Brush Company debuted in the early 1900s and it was Alfred Fuller who is credited with transforming door-to-door direct selling into something different. Rather than positioning himself as a salesman who sold brushes and focusing on the features of the brushes, he instead focused his attention on selling the benefits of his brushes to the consumers.

The early 1900′s also saw the emergence of vacuum cleaner and encyclopedia companies such as Electrolux, World Book and Britannica.

The term “network marketing” specifically is 20th century creation.

It is out of this trend that the term “belly to belly” marketing – or warm market as you may better recognize it – was coined.

A company named California Vitamins came to the realization that many of their new sales recruits were in fact friends and family of their existing sales force. That led the company to recognize it was easier to build a sales force with a lot of people who sell a small amount of product, than it was to find a small number of top sellers who would move mountains of product.

And so California Vitamins designed a revolutionary sales compensation model encouraging their salespeople to invite new representatives from satisfied customers, most of whom were family and friends. This allowed the sales force to grow exponentially. The company rewarded its representatives for the sales produced by their entire group – or network – of sales representatives. And so multi-level marketing was born.

The original party plan was the Stanley Hostess Party Plan, by Stanley Home Products. The focus of the party plan was to demonstrate the myriad of uses and benefits of the products right in the home. Out of the original Stanley dealer roster came the founders of such future marketing program giants as Mary Kay and Tupperware.

The introduction of the multi-level, person-to-person sales program in the mid 1950s coincided with another pair of new giants arriving on the scene: Shaklee and Amway.

The Advent of MLM

The term multi-level marketing, or MLM, became a part of the industry lexicon. And the direct selling industry would never be the same.

The popular notion that MLM companies are illegal pyramid schemes really gained steam in the mid 1970s when the US Federal Trade Commission (FTC) charged that Amway and its multi-level marketing structure constituted an illegal pyramid.

Out of that court decision, the “Amway Safeguard Rule” set the legal standard for direct selling, multi-level, and network marketing based companies going forward.

The Myth of the MLM Pyramid

Amway and its multi-level structure were targeted by the FTC partly in response to a proliferation of pyramid programs in the 1970s. There was no underlying product or service. It was the emergence of several high profile schemes that led to a rash of regulatory requirements and the ultimate targeting of MLM as a structure. It also led to the clarification of speculative or fraudulent schemes and legitimate direct sales activities.

The Amway Safeguard Rule identifies three key points which ensure the validity of the opportunity. It was the existence of these three points as part of the Amway structure that led the court to conclude the business was not an illegal pyramid.

These therefore are important criteria with which to assess any network marketing or MLM opportunity and establish whether it is in fact legal as opposed to “one of those pyramid scams”.

Does the opportunity require the retail sale of products or services before one can qualify for any recruiting commissions or sales?

Does the opportunity have a mechanism in place to prevent the stockpiling of inventory of physical products with no intention of reselling?

Does the opportunity offer representatives who choose to leave a buy-back provision on unsold, unopened inventory or products?

The term “network marketing” became popular in the 1980s.

Ultimately, direct sales and multi-level marketing are distinct subsets within the overall network marketing industry. Multi-level marketing is where the profit or commission for a retail sale is shared with an up-line (or recruiter). Typically there are also bonuses paid based on recruiting activity, so long as the recruiting is accompanied with ongoing retail sales activity. In Direct sales, typically only one profit or commission for a sale is paid to one person, so there is no sharing of the profit with the up-line recruiter.

MLM and Network Marketing Gains Legitimacy

A number of very well known and respected authors and business people began to lend their public endorsement to the industry. People such as Brian Tracy, Robert Kiyosaki, Paul Zane Pilzer, Jim Rohn, and even Donald Trump began to openly talk about the merits of the industry and, in fact, encouraged people to consider it.

At the same time, network marketing has morphed into a proven, preferred method of product distribution by some of the largest companies on the planet. Corporations came to the conclusion that network marketing, as a distribution channel, offered many advantages, not the least of which is that it’s lower cost.

Commissions are only paid on the sale of product or services and the structure allows the companies to offload much of the time and training requirements onto its representatives, who are incented to train the new representative they recruit. So it’s a very cost effective method of distribution for a business to utilize.

In particular for new product launches, network marketing distribution allows companies to avoid costly traditional advertising campaigns.

Pretty soon telecommunications companies, travel companies, satellite providers, financial services companies, and many other industries joined the party. Today there are literally thousands upon thousands of network marketing based companies operating throughout the world.

]]> http://www.enablernetwork.org/what-is-mlm-and-network-marketing-an-overview-of-a-powerful-home-business-model/feed 0 What Is Network Marketing? http://www.enablernetwork.org/what-is-network-marketing-3 http://www.enablernetwork.org/what-is-network-marketing-3#comments Thu, 28 Jan 2010 06:31:25 +0000 admin http://www.enablernetwork.org/what-is-network-marketing-3

Network marketing is a low-overhead, home based business that can actually offer many of the tax advantages associated with owning your own business. It is a system for distributing goods and services through networks of thousands of independent salespeople, or distributors. It is one of the few businesses that does not require employees, yet enables the owner to leverage his or her time by building a network of independent business people and is probably the easiest way to create passive wealth from nothing. Network Marketing is a legitimate business not a get rich quick scheme. Network marketing success involves developing and keeping a good business relationship with those you recruit in the business a good business.

Network marketing as a business model has been around for a long time, but only recently has it started to gain traction as the marketing model of the future with powerful endorsements from Kiyosaki, Trump, and Allen, not to mention the thousands of major corporations that are using network marketing principles in their affiliate programs. This type of marketing started in the USA and some of the longest-standing companies using this method include Amway, Ann Summers and Kleeneze.

Why Network Marketing is Popular?

One reason why so many people of all ages are interested in network marketing is the Internet. Though network marketing is an old concept it has got a real boost by the development of Internet. Thanks to the Internet now it is possible to build a worldwide business of your own in a very short period of time. The Internet allows network marketers to connect with people who are actually looking to start a business from home. However, Internet based network marketing can be as daunting to the beginner as to the more experienced in business, especially when considering the size and power of the Internet. The secret to success in Internet based network marketing is a simple duplicable system that anyone can follow.

The Internet now enables network marketers to build national and international businesses from the comfort of their home. The combination of the Internet with network marketing provides a Tidal Wave of opportunity for those perceptive enough to get involved. Most internet businesses that people become involved in these days are actually home based Internet businesses that require a strong network marketing component for success.

Benefits for Joining a Network Marketing Company

Joining a network marketing program means giving yourself the liberty to pursue your dreams. Whether you are someone who wants to work part-time in the evenings or at weekends, or someone who wants a brand new full-time career, network marketing is something you can always fit into your personal lifestyle. A network marketing business opportunity is a chance to work from home while making a decent living wage. Once you build your Network Marketing team, you could go on holiday and know that you are still earning cash that is growing.

]]> http://www.enablernetwork.org/what-is-network-marketing-3/feed 0 Network Marketing Training-The Cure For Failure http://www.enablernetwork.org/network-marketing-training-the-cure-for-failure http://www.enablernetwork.org/network-marketing-training-the-cure-for-failure#comments Sat, 19 Dec 2009 23:15:13 +0000 admin http://www.enablernetwork.org/network-marketing-training-the-cure-for-failure After two long years, it hit my like a brick. Maybe I’m a slow learner or maybe I just lost my objectivity once I signed on to become a network marketer.

As you’re probably aware, network marketing (formerly well-known as MLM) got its start way back in the 1950s. It’s hard to believe it’s been around that long. It’s even harder to believe one of the original companies in this industry, Shaklee, is still around-some 50+ years later.

But it’s Amway that most people associate with the term MLM. They put this business model on the map and at the same time left a bad taste in some people’s mouths. Whichever way you feel about Amway and the “tactics” some distributors used, one thing is for certain, they had really good network marketing training for their distributors.

This is a rarity nowadays because most network marketing companies don’t offer any kind of training. In fact, many companies promote no special skills or training is needed for success. Most business people know that marketing know-how along with other business concepts are needed in order to be successful; but the problem is that most people who come into network marketing aren’t business people.

They are average people who want to get out of the normal 9-5 rat race they call a job. These average people also consist of moms who have not set foot in the workplace in years if at all. To expect the average person to be sophisticated enough to run a business successfully from home without any skills or training is an unrealistic expectation-wouldn’t you agree?

Now, here’s the flip side. If you think it’s the responsibility of the network marketing company to give you all the training you’ll ever need, think again. After all, they are providing you with the opportunity. But again it is irresponsible of these very same companies to promote that no skills or training is needed in order to become successful.

If you knew it would take training and learning key business concepts to have prosperity in network marketing, I’m sure you would’ve given it a second thought. You see the average person going into this particular business model doesn’t have the wherewithal to know exactly what it takes to achieve success.

Some people try to put network marketing in a special little category-a category where it takes no business skills to run a home business. Rubbish. A business is a business. It doesn’t matter if it’s run from an office, storefront or a home. By the time most network marketers realize this, they’re usually on their 6th or 7th company and more dead broke than when they first started out.

If you don’t have the right training and skills, you end up getting frustrated and either quit the industry all together or do what most people do-join another program and then another and then another. If this is you, welcome to the club, because you’re not alone.

Most people get caught in that vicious cycle. They are doomed to repeat it over and over, unless they seek out training. Although there are a few other companies besides Amway that offer training, you should know that if your company doesn’t, you should consider getting training elsewhere to help put the odds of success in your favor.

It shouldn’t be a requirement that network marketing companies offer training, but it would be nice if they did; it would be even nicer if they stop advertising and promoting that no skill set or training are needed to have success in a home business. This is the real disservice they do to the industry. Network marketing training and marketing skills are necessary for success in your business-that is if you want to stop failing.




By: Corrisa Malone

]]> http://www.enablernetwork.org/network-marketing-training-the-cure-for-failure/feed 0 How to Chose the Right Network Marketing Company in Five Simple Steps http://www.enablernetwork.org/how-to-chose-the-right-network-marketing-company-in-five-simple-steps http://www.enablernetwork.org/how-to-chose-the-right-network-marketing-company-in-five-simple-steps#comments Thu, 10 Dec 2009 14:07:46 +0000 admin http://www.enablernetwork.org/how-to-chose-the-right-network-marketing-company-in-five-simple-steps

With so many network marketing companies out there to chose from it can be fairly easy to get lost at sea when it comes to choosing the right network marketing business for you. This article will take a look at what options you have and provide five simple steps for you to follow in order to make the right decision when setting sail on the network marketing ocean. Ready to get going? Okay…

Company History

There are literally thousands of companies out there using a network marketing model to build their business through an army of distributors so you won’t be spoilt for choice when searching for network marketing companies but what should you look for?

Annual growth is a good indicator – look for gradual growth across a number of years which will indicate solid profits and stability.

Research the CEO or founder of the company also to see what their own history is. Some network marketing companies have literally pulled the business away from people after years of work and changed the marketing model overnight so don’t get caught out by this one and if it looks as though the CEO has a history of turning a business model around and then moving on in a couple of years then perhaps you should pass this network marketing company by.

Product

Everywhere you look right now someone is shouting about the next best product to stop you from growing old, getting fat, losing hair, losing your memory or feeling like the world is going to fall in on you and network marketing companies are no different. They will all say they have the most essential product but how can you tell truth from fiction?

Look at the trends first of all – what are people searching for right now when looking for products to either improve their health, looks or finances?

Look at the pricing second – does your product (or the network marketing company’s product) seems well priced in the marketplace or way over the mark?

Look at the competition for the product last of all – this is the one which will make or break the deal. There are hundreds of network marketing companies selling nutrition products for example and in the United States alone over 50 telecommunication companies using a network marketing model to increase their customer base so before you jump onboard with what looks like a great company check out the competition.

Training and Support

This is arguably the most important area to research. MLM companies have a history of teaching a ‘belly to belly’ approach to building a business. What I mean by this is a big emphasis is placed on introducing friends, family and other ‘warm market’ contacts to your business model. Some will still argue that it’s possible to build your business in this way and with time it probably is but only a certain type of person can do this and not everyone has a ‘warm market’ who will accept your network marketing offering in good faith (trust me, I’ve been there!). So what’s the alternative?

The alternative is to understand and develop marketing skills such as branding, advertising, copywriting and link them to effective sales skills to build your network marketing business with people looking for your opportunity. They’re out there! You just have to know how to put your network marketing business in front of them.

Compensation Plan

This is what MLM companies call the payment model which allows you to receive a commission based income for the work you have done on their behalf. This might seem complicated at first and it’s very easy to get lost in the small print as different network marketing companies offer different ways to generate an income and numerous bonuses for the work you do to attract customers, build your business and help your team but pay attention to this point or it could prove pretty painful. So what do you need to consider?

You need to look at several areas to make sure your work will be rewarded. Don’t get stuck with a compensation plan which prevents you from earning because nobody in your team is pulling their weight. You should be paid for your work and if the people you recruit work with you to build their network marketing business you should start to receive earnings from their efforts also. That’s the power of this business model after all.

Marketing Model

More and more MLM companies are beginning to recognize the need to move online and offer you the opportunity to leverage your time by building your network marketing business on the internet. This is good news as it allows you to increase your outputs in advertising and marketing across a vast online marketplace and leverage your time whilst doing so but it can also be expensive and there are several pitfalls to consider if using paid online advertising. So what can you do?

You need to develop a good understanding of internet marketing and if this means investing in self development then invest! This is a business you’re building so treat it as one and budget for training and development as part of your network marketing plan.

The second part of the equation is in the marketing model your business has in place. If you are going to build online you need to have a streamlined marketing funnel in place which will support your efforts, automate a lot of the work and develop an additional revenue stream for you as you build your business. This is done in many different ways and can be as simple as offering a sample pack of your product for a small price at the outset which the company will subsidize or asking the prospect to pay a small amount for a business report or company information. Either way, the idea is to generate an income stream and additional revenue for you when building your network marketing business from the marketing model even before people join your business. Why? Because 95% of your leads will NOT join your company and if you keep paying out for leads who walk away from your opportunity you will run out of money fast. Cashflow is the name of the game in any successful business model and network marketing is no different.

As you can see, there are a number of things to consider before rushing into the MLM world and my advice is simple; take the time to look into all areas of the business before putting your money and time on the table.

Don’t forget; multi level marketing works! It may take several months or years to start to see a return on your investment, commitment and dedication but when you do start to turn the corner you can look forward to a bright and prosperous future in network marketing.

The bottom line is that this business is not for everyone. It takes focus and determination to acquire and develop the skills needed to market your business effectively and if you want to be one of the 5% of networkers who do build a successful network marketing business you have to be prepared to work hard over a period of time for little or no reward before you can start to leverage your efforts into a growing income.

]]> http://www.enablernetwork.org/how-to-chose-the-right-network-marketing-company-in-five-simple-steps/feed 0