Saturday, May 31, 2008

What is Network Marketing?

Seriously Though, What is MLM? We've heard the term a million times, we've watched , but do we really understand the concept and the ins and outs of Multi Level or Network Marketing? Amway seminars immediately comes to mind and most women these days have been approached at least once by an independent consultant for Mary Kay Cosmetics(NWM for Cosmetics). For the majority of us, the reality is blurry, buried in the back of our minds just in case we ever muster the courage to take the plunge. Multi Level Marketing (MLM) is one of the fastest growing businesses today. In fact, it is not an industry but simply a marketing method for moving product from Point A to Point B. The concept spread like wildfire through the 80's, picked up a little negative press in the early 90's and has rebounded in the 21st century as the wave of the future. Many people tend to confuse MLM or Network Marketing with Pyramid Schemes. Pyramids are actually illegal.
The easiest way to identify a Pyramid Scheme is to ask yourself two simple questions.
(1) What is the product? And
(2) where it is going?
Something has to move! Multi Level Marketing moves product on various levels hence, it's name.
Here's how it works.
In MLM you are in business for yourself. You purchase products directly from a wholesaler at wholesale prices. Product moves from Point A to Point B. You can, if you wish simply use these products for personal consumption or you can resell them at a retail price to make a profit. The most common misconception, however, is that you have to sell retail to be successful. Not true depending on the company you've chosen to work with.In the majority of MLM programs, the true success comes from building the organization or your downline. Your sales will come as a result. Getting a little nervous? We mentioned the word sales.
That word will generate a negative response in almost 95% of the people who hear it. If you're seriously considering Multi Level or Network Marketing as a career, the first thing you need to do is instantly replace the word sell in your vocabulary with the word share. We all love to share and we were actually taught that skill when we entered kindergarten. If you can share, you will be successful in this business. When you build your organization or your downline, what you're actually doing is building a network or a funnel for your product or service. The sale of a product comes when distributors share that product with family, friends, coworkers and/or neighbors.

Now, visualize a single thread from a spider's web. As the spider continues to expand his web it continues to grow and reach in all directions. This is exactly how MLM works. As you meet people who are interested in doing what you're doing, you recruit them. You become responsible for their training, helping them to build a business of their own just like yours. From that single thread becomes a massive web. Each thread that makes up that web ultimately leads back to you. Each thread is moving product from Point A to Point B either through their own personal use or the sharing of the product with their friends, family, coworkers and neighbors. As your web expands you become the person at the top, the business owner who is successfully directing potentially hundreds or thousands of people who are busy moving that product or service from Point A to Point B. Depending on how your particular program is set up, you are financially compensated for every person and the product they move. The most obvious difference between MLM and a Pyramid is that anyone can come into a network-marketing program and end up on the top. In a pyramid scheme, however, the top remains the top and very few people actually make any money before it collapses.

The products and services currently being sold via Multi Level Marketing continue to increase. Corporations are beginning to realize that the dollars they spend on advertising their products and attempting to identify their markets are better spent on the consumers themselves.
Who do you prefer to purchase your consumables from, your best friend or the big chain down the street that doesn't pay any attention to you when you walk in the door?