How Network Marketing Works

Today there are millions of people around the world building this unseen industry called network marketing. You do not see them but they are everywhere, some probably right in your own neighborhood. It is a business in which common people can invest a small sum of money and rise to staggering levels of financial reward and personal freedom.

Each day millions of people report to work, where your employer leverages your time to build his or her business and financial future.

In Network Marketing we help and assist others in building their business. We are also leveraging their time, with each of us is gathering customers along the way.

Hence the name Network. We get paid for this because we are assisting, coaching and helping them to establish their business. Helping them to reach their goals for their financial future. So Its only right that we also get paid for our time?

Just like your employer leverages your time, through network marketing you can leverage the time of others. What does this mean?

Lets take a look at a typical employer in a service industry with 100 or more employees. That has a labor rate of 60 dollars per hour. The goal of our employer is to keep each employee active and busy for each hour paid.

Out of this once all the costs of doing business are factored in such as wages paid, health insurance, unemployment insurance, federal taxes, state taxes, fica taxes, permits, maintenance, housekeeping, the list just goes on and on. The employer may get to keep 5 to 10 dollars per hour of that labor rate.

In Network Marketing, we have our initial start up costs anywhere from just a few dollars to several hundred dollars. Where most network marketers fail is they feel that they do not need a marketing budget for advertising, they do not seek out the education required to succeed.

One of the important things to remember is, you are in a real business, you no longer have a boss holding you accountable. Your network marketing success or failure is dependent upon you and your actions.

Your primary task will be to gathering customers for your products or services. To help and assist others get started in their own business partnered with you. You are looking at a business model that will take 3 to 5 years to produce the kind of results you're looking for.

So don't give up your day job just yet. It will require 5 to 20 hours of consistent time and effort each week to build a successful Network Marketing Business. It will require a marketing budget, most people do not even consider this. Once again this is a real business this is your business, not a get rich quick overnight program, although it has been hyped by a great many naive marketers and web sites.

Network marketing is based on word of mouth advertising which is the most effective form of advertising. Think about it when you go out, watch a great movie, you will go out and tell people about it. When Sam's club or Costco moved to your area, you joined their buying club and started telling everyone how much you saved. This is the power of word of mouth advertising.

Major advertising agencies and companies count on this. This is one of the things that we do as network marketers. The major difference is that we get paid for our word of mouth advertising.

One of the most often asked questions is, will I have to sell products and services? The answer is of course yes. Think about it, no one likes to have a salesman or woman come to the door and sell them products right. We hate to go to the automobile dealers, where we are swarmed with 5 different sales people all trying to get you to buy from them right!

So how are we as a network marketer different? We recommend products or services that we like and personally use. If we know it's good and personally use it, recommending it to our friends and family is very easy.

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Direct selling is a dynamic, vibrant, rapidly expanding channel of distribution for the marketing of products and services directly to consumers. The purpose of this paper is to describe direct selling and the benefits that it brings to the marketplace.

Direct selling provides important benefits to individuals who desire an opportunity to earn an income and build a business of their own; to consumers who enjoy an alternative to shopping centers, department stores or the like; and to the consumer products market. It offers an alternative to traditional employment for those who desire a flexible income earning opportunity to supplement their household income, or whose responsibilities or circumstances do not allow for regular part-time or full time employment. In many cases, direct selling opportunities develop into a fulfilling career for those who achieve success and choose to pursue their independent direct selling business on a full time basis.

The cost for an individual to start an independent direct selling business is typically very low. Usually, a modestly priced sales kit is all that is required for one to get started, and there is little or no required inventory or other cash commitments to begin. This stands in sharp contrast to franchise and other business investment opportunities which may require substantial expenditures and expose the investor to a significant risk of loss.

Consumers benefit from direct selling because of the convenience and service it provides, including personal demonstration and explanation of products, home delivery, and generous satisfaction guarantees. Moreover, direct selling provides a channel of distribution for companies with innovative or distinctive products not readily available in traditional retail stores, or who cannot afford to compete with the enormous advertising and promotion costs associated with gaining space on retail shelves. Direct selling enhances the retail distribution infrastructure of the economy, and serves consumers with a convenient source of quality products.

An important component of the Direct Selling industry is multilevel marketing. It is also referred to as network marketing, structure marketing or multilevel direct selling, and has proven over many years to be a highly successful and effective method of compensating direct sellers for the marketing and distribution of products and services directly to consumers.

Direct selling should not be confused with terms such as direct marketing or distance selling which may be described as an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location, with this activity stored on a database. Some commonly known types of direct marketing and distance selling techniques are telemarketing, direct mail, and direct response.

Although direct selling organizations occasionally use some direct marketing or distance selling techniques and technology to enhance their businesses, the primary difference between the two methods of marketing is the face to face, or personal presentation that is always an aspect of the direct selling relationship.

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Network Marketing is a relationship business; it is about helping people build a business or focusing on your customers for your products and services. Network Marketing really is an unseen business and it is all about sales.

It is businesses in which anyone can invest a small sum of money and through sheer tenacity achieve staggering levels of financial reward and personal freedom. But it requires education based on market tested results.

Network Marketing does not have giant signs or large offices, yet according to the Direct Selling Association (DSA) over 13 million people in the U.S. are working in the network marketing / direct selling industry.

The Network Marketing / MLM industry has a very shady reputation. Many of the people you will talk to feel it is a scam. Are they justified in this opinion? In many ways they are justified, but you can make a difference with the way you market your business.

In the 1950s when Franchise first emerged they where labeled a scam, illegal etc. Fortunately a franchise is not labeled as such anymore or quite possibly you would not be enjoying your favorite hamburger today.

In network marketing there are reasonably priced products and services that people consume in a short time. Generally the commission structure is less up-front then the direct sales companies, but it has a benefit that most direct sales companies do not have and that is residual income:

Network marketing is all about sales and distribution, but a different kind of sales. It's more of a soft sale or recommendation then the hard closing type that you're accustomed to with the typical salesman or saleswoman in the direct sales. The best approach by far in network marketing is a consultative sales approach. This is used very successfully today.