How does Network Marketing work?

Network marketing is a business style that literally allows you to network with other business owners, attract new people to the network, share ideas, mentor new business owners, and help each other build successful businesses. Network marketing has been around for a very long time, but the internet has made it a more powerful business design than ever, with a global reach that was nearly impossible even two decades ago.

Network marketing allows you to own your own business while still being supported by others in the industry (those who introduced you to the business) and the basis of the business is that as you are building your business, you are also giving others the opportunity to join the network and achieve the same freedom as you by owning their own business. The success of each individual contributes to the success of everyone, so rather than being a cutthroat industry, it promotes social connection in a supportive environment.

If you are just getting into network marketing, expect it to take some time to be successful enough to leave the corporate world behind you. Expect to have to work while you build your business, and be prepared to spend 10-20 hours a week in building your business if you want it to be able to support you without relying on your corporate income.

Network marketing used to rely on word of mouth advertising. You would introduce the business to friends and family, who would introduce it to their friends and families and so on. If anything, the internet makes network marketing rely even more on word of mouth marketing it's just that, now, the word of mouth advertising grows exponentially. Instead of talking to one person or a small group at a time, you can have multiple internet tools working for you. Some of these tools include banner ads, blogs, collaborative technologies like Facebook and MySpace, Google adwords, pay-per-click advertising, and internet websites.

With more than one billion people using the internet, the potential to build a large network is unlimited. The internet allows you to work from home, on your own schedule, with extremely low costs of doing business. Other than an internet connection and a good web hosting service, your costs are minimal, meaning your advertising and marketing budget stretches further and reaches more people.

Because the internet allows you to expand your network quickly, it is important that you plan well from the very beginning. Make sure you have an image and brand identity that work for you; establish yourself as a credible businessperson through regular blogging efforts. Be a true presence on the web and within your industry. If you don't understand the tools that are available to you, educate yourself. Buy an ebook, hire a consultant, contract with a professional writer to provide content. Remember that everything you do on the internet has a lasting and profound affect on the success of your business, so approach it with the seriousness, professionalism, and enthusiasm that will bring you success.

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About the Author:
E.J. Saunders will help you to build a network marketing business online

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!