What is Network Marketing?

This business is about utilizing your network and building new networks of customers and distributors to generate sales of products and services.
To this day, many “possibly even you” associate it unfairly as a pyramid or ponzi scheme. In the 1950's when Franchise’s first emerged they where labeled a scam, illegal etc.
Today, many traditional businesses embrace this form of marketing, it allows them to reach customers they might not otherwise. Generally, you cannot see them, it could be your next door neighbor is involved in it right now. Typically a home business 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 within this business model.

It is a form of business in which you can make a small investment and through sheer tenacity achieve staggering levels of financial reward and personal freedom.

I believe Robert Kiyosaki summed it up nicely; it really is the
business school for people who like helping people!

Let’s take a look at the two types of business models that you could be involved in or approached with:

Network marketing / Multi-level marketing (MLM)

These companies typically though not always offer 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 which is the leverage from building an organization.
Today there are hundreds of companies you can look at, they cover everything from: Communication Services, Internet Access, Nutritional Products, Weight Loss Programs, Water Filtration Systems, Financial Programs, Electrical Power, Solar Power.
Typically costs less to get involved, from free to a few hundred dollars.
It allows more people to become directly involved.
It can build lasting residual income.
Leverages the time of others.
This business model is about sales and distribution; the ability to sell is the most important business skill you need. The best approach is the consultative sales approach, focusing on your customer’s needs.

Direct Sales Companies

These companies are known as seller-based, they market higher priced, usually one time sales items. The benefits of these programs are you make higher commissions, yet often they have very little if any residual income.
Essentially if you stop working so does your income, you are paid directly on what you personally sell, you have to sell lots and lots of merchandise. This also limits you to the type of people you can bring into your business as the “salesperson” type.
Affiliate programs fall under the direct sales company model. You only get paid when someone orders a product. There is nothing wrong with affiliate programs, some of them do produce a residual income as customers order the products or services on a continuous basis.

The only issue, I really have with many but not all affiliate programs, is the company then has the customer contact information and they really no longer need you anymore. It then becomes a one time sell for you, a long term contact for them.

I have found this to be a very rewarding career choice, the freedom from punching someone else’s clock, and now having to punch my own is really an eye opener. With todays economy the way it is, uncertain recession, inflated prices, working from home makes more sense then ever before.

Starting and running your very own business is not an easy task. If you’re willing to put in the time to educate yourself, to learn the most important skill you’ll need in life, the ability to sell, then it just might be right for you.
If you not only like working with people, but also helping them get more out of life, then this might just be for you! On the other hand, if you’re only in it for the money, odds are you’ll probably fail!