What is Network Marketing?
Network marketing is also known as Multi-Level Marketing (MLM).
It is a form of franchising based on the concept of word of
mouth advertising. For example, what if you watch "Jurassic
Park", you like the movie & you recommend it to your friends, who
in turn tell their friends. At the end of the week or month, Walt
Disney paid you a commission based on the number of people who
paid to watch the show because of your recommendation! Wouldn't
that be great?
. Companies such as Walt Disney paid advertisers millions of
dollars in advertising money. Network Marketing companies on the
other hand, take this sum of money and instead of paying to
advertising companies, pay this sum of money to independent
distributors who help them to advertise via "Word of Mouth"!
. Would you agree that franchises like McDonald & Kentucky Fried
Chicken are hugely successful? The reason is that they are
duplicating a successful system. But flash back to the early
years & it was labelled as a scam!
. Similarly Network Marketing uses the concept of franchising to
let ordinary, common folks to run their own business with an
easily duplicatable system but at a fraction of the capital
investment & with minimal risk! Minimal risk because of the low
capital investment required.
. Network Marketing has been labelled by the National University
of Singapore’s Graduate Society as "The Wave of the Future"!
Companies like IBM, AT&T, Colgate Palmolive & even Singapore's
biggest local bank DBS, use network marketing to distribute their
products!
. In the US, Network Marketing is a US$106 billion turnover
industry with a growth rate of 25%!
. Consider the following: in the past 7 years, in US, 64,000
millionaires achieved their fortune through Network Marketing!
The growth rate is estimated at 20%.
Direct Sales vs Network Marketing
What are the fundamental differences between Direct Sales &
Network Marketing?
. In Direct Sales, the model is based on a few people doing a
lot. In Network Marketing, it's exactly the opposite; a lot of
people doing a little bit each.
. Imagine that you have a product and you want to sell $1,000,000
worth over the course of one year. In the conventional Direct
Selling model, you might hire a sales force of 100 people and
impose a sales quota of $10,000 per person.
100 x $10,000 ?$1,000,000
. In Network Marketing, we simply reverse the numbers to achieve
the same result. Here, we have 10,000 people, all responsible for
only $100 each!
10,000 x $100 ?$1,000,000
. This is exactly what J. Paul Getty was talking about when he
said, "I'd rather earn one percent off the efforts of 100, than
100 percent off the efforts of one."
Is it Selling?
. Now, you may be thinking, "Well, I still don't want to sell
anything? I'm not good at sales."
. Great! This is where a powerful segment of the opportunity
comes in. You're already doing it; you're just not getting paid.
Would you like to see how you could now get paid for what you're
already doing?
. You're Already an Expert!
. "How is that possible?" you may ask. Have you ever recommended
a movie, book, restaurant or anything else to a friend, co-worker
or family member? Of course you have - we do this all the time.
If someone took you up on your recommendation & actually enjoyed
the movie, do you think it's likely that they recommended it to
someone else? Of course-this kind of word-of-mouth recommendation
occurs every day.
. Now, let me ask you an intriguing question. You paid to see the
movie & the people you recommended it to also paid when they
attended the movie, right? Furthermore, the person they told
about the movie paid to see it as well! Now, did you get a check
from the theater thanking you for the referral? NO! Did the
person you recommended the movie to get a check? Did the person
they told get paid? Of course NOT!
. The only persons who got paid here was the theater owner & Walt
Disney while you did the advertising for them. How would it be if
you got paid for every recommendation you made & so did those you
told? That's the beauty of Network Marketing.
. You, & those you tell, all get paid for doing what you're
already doing.
What is a pyramid?
. It is an organizational structure where the people at the top
make more money than those beneath them. This describes every
conventional company in existence! The problem with the
conventional company is this: there exists a structure whereby
the CEO generates income from the efforts of each person below,
but those workers do not have the opportunity to earn as much as,
or more than, the CEO.
. Have you ever heard of a general worker [GW] who makes more
than the CEO or the General Manager [GM]? Does middle management
ever make more than the company's senior management does? Not
typically! The old model just isn't fair for those underneath. No
matter what their effort, they can never make more than those
above them can. The pyramid is not equitable.
. In Network Marketing however, you are building an income from
the production of everyone in your organization whether you
directly sponsored [a sponsor is one who recruits and trains
another distributor.] them or not. Each person in your
organization can do the same, so now you have created a situation
where everyone has the same amount to gain. It's the fairest
structure available because everyone can create exactly the same
situation. And in fact, due to the nature of Network Marketing,
people under you can & do in some cases, earn more than you
simply because they can access levels that you cannot. Everyone
can reach down into their organization the exact same number of
levels. If someone has created more volume in their levels than
you have in yours, & some of those levels are beyond your ability
to reach them, that person can actually make more than you can,
even though they are UNDER you!
. This makes it the absolute FAIREST system available because it
compensates people based on their contributions & efforts, not
based on where they fall in the system. Once again, why should
someone earn as much as you if they're not making the same effort
that you are?
. IT REALLY WORKS!
Facts about network marketing
. Network Marketing is a method of distribution & compensation
that has been utilized in the United States for over 50 years and
which is now spreading across the world. The Direct Selling
Association (DSA), based in Washington, DC, represents the
Network Marketing industry. The DSA has existed for more than 100
years.
. There are in excess of 1,000 Network Marketing firms that
distribute over $100 billion a year in goods & services. It is
estimated that eight to ten million Americans are either
part-time or full-time distributors. Tens of millions more are
customers.
Myths about network marketing
. Network Marketing does not work. The big guys make all the
money off the little guys.
. Well, Network Marketing DOES work. What usually does not work
is a particular company, product or distributor. You must decide
for yourself whether you work or your chosen company works or the
product works.
. Let's consider the concept of big guys versus little guys.
Usually the people who perpetuate this myth are those who define
fairness in terms of everyone receiving the same benefits
regardless of their contribution or effort.
. In Network Marketing, the people who attract, train & motivate
the most people earn the most money. If you sell/consume $100
worth of product yourself each month, plus you build an
organization of 100 people who do the same, you will earn a great
deal more-100 times more, to be exact-than the person who only
sells/consumes $100 per month. Now, that's fairness! Why should
someone earn as much as you if they're not making the same effort
that you are?
What is wealth?
. Wealth means different things to different people. For some
people, wealth could mean big cars, big houses and anything that
makes you look and feel good. For some it could mean long term
financial security.
. Robert Kiyosaki, author of Rich Dad, Poor Dad, a New York Times
bestseller, defined it as "the number of days that you can
survive forward if you stop work tomorrow". Think about that for
a second. How many days can you survive forward if you stop
working tomorrow. What would your answer be?
. Whatever your answer, would you agree with me that true wealth
is when you can say that "if I stop work tomorrow, I can survive
forever and the money will come somewhere, somehow and I do not
have to work for the rest of my life"?
. TIME IS OUR MOST SCARCE RESOURCE. It’s been said that TIME is
LIFE and LIFE is TIME. When we leverage our time to create
wealth, we are actually maximizing our life to create wealth for
ourselves.
. Ask yourself: "If I continue to do what I am doing now, will I
acquire true wealth?" Some of you may say "yes" but for many, the
answer will be "NO". The greatest insanity, is to do the same
thing everyday and expect different results. If we want a change
in our life, we must change our life.
. Statistic tell us that by the time we reach 65 years of age,
36% of the people will be dead, 54% will need to depend on others
to survive, 5% still have to work for a living, only 4% are able
to be financially independent but only 1% will achieve their
dreams to be rich and wealthy.
Four key ideas for creating wealth
. Paul Getty, a noted businessman, said there are 4 things one
must do in order to be rich.
1. Be in a business for yourself.
2. Have unique, highly consumable products.
3. Be able to build success upon the success of others.
4. Leverage your time - "having 1% of 100 people’s efforts than%
100% of one’s own effort."
. Which scenario do you prefer?
:: NO Time & NO Money
:: Have Money but NO Time
:: Have Time but NO Money
:: Have Time & have Money
Different types of income
. Linear Income - here you exchange your time for money. The more
money you want to earn, the more time you need to give up.
Examples include salaried workers. If you stop working, your
income also stops.
. Residual Income - here you do the work once and get paid for
eg. by earning royalties. Examples include writers, singers.
. Multiplex Income - this is income earned by leveraging.
Consider the McDonald franchise concept. Ray Kroc did not become
a millionaire by selling hamburgers. He had independent business
owners who bought a franchise from him. They sell the hamburgers
for him and each pay him a franchise fee and also a percentage of
sales. What Ray has is a proven system. A system that can be
duplicated. Multiplex income is based on the concept of "the
power of duplication". Examples include franchising & Network
Marketing.
Business opportunities
Before embarking on any business venture, it is imperative to
recognize emerging trends and capitalize on them. There are 3
trends that present tremendous growth opportunity for everyone of
us, right now and that is the trend of network marketing (also
known as The Wave of The Future), internet marketing and health
food industries.
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