Friday, June 8, 2007

What is Network Marketing ?

Another common word associated with Network Marketing, is Multi-Level Marketing or in short, MLM. Financially it's one of the fastest growing business in the world today, but sadly not many of us out there are aware of this. Network Marketing is in the overall commonly a misunderstood business. So let's find out here, "What is Network Marketing" all about?

Financial figures in the 90's showed that these so called Network Marketing companies had showed sales of 100 Billion Dollars worth of products on a annual basis. Now, wouldn't you want to get involved in a business as such?

To break things down for you, Network Marketing simply would mean, moving a product or a particular service from point A to point B, like from the producing source and then straight to the consumer. Although there are many different abbreviations for this word such as; Uni-Level Marketing, Co-op Mass Marketing or Multi-Generation Marketing, in the end, it all means the same, different people at different levels, all sharing high quality products with the intention of ultimately achieving a particular target of recognition and status, which ultimately boils down to money. Network Marketing is regarded as a system whereby means of compensation are provided by these so called Network Marketing companies to associates who ultimately move their products and their services.

On average Network Marketing companies use this three basic methods of moving products :

  1. Retailing - Just like a grocery store, a place where you go and buy something, this is the perfect example of retailing.
  2. Direct Sales - Examples like in the old days where there used to be Tupperware parties or an Insurance agent, Amway, Cosway and all the other Direct Sales efforts.
  3. MLM or Network Marketing - Please do not confuse yourself with the Direct Sales method (but sadly this is always the scenario)
Besides the list above, there are also other avenues of sales being done, but be warned of certain companies that use these banned Pyramid Schemes. I mean come on, the whole world is aware that Pyramid Schemes are illegal! But people still do get caught up in these sort of schemes.

It's understandable why people often associate Network Marketing with Direct Sales, it's usually because they are not aware of the facts surrounding the difference between the two. Further more Network Marketing companies are generally grouped into the same categories in the Direct Sales Association when they are first registered, so that makes explaining the difference a bit more difficult.

The word "selling" itself would push someone to a corner and hide. Imagine an Insurance agent knocking at your front door, the first thing in your mind would be to make the impression that there is no one at home, right? But as all Marketing Guru's out there would say : "Only 5% of us can be successful", so that leaves the balance 95% of the population of the world to be negative in their thoughts. Because of this perception, a lot of people out there feel that Network Marketing is all about "selling"and nothing more, and that's the only way that's gonna make you successful. How wrong they are.

But to put things in the right perspective, you don't actually need to "sell", in all honesty. But we do agree that the products have to move if not how else would you make money from this business. The tip to this, is that you have to let your sales come from a "natural source" whilst you're building your organization. Network Marketing surely does not emphasize the selling aspect on the whole.

First things first, you must acquire skills such as this :
  • "Share", do it with your colleagues, friends, relatives, family and so on. Make them aware of a higher quality product available in the market, compared to whatever they are using currently. Because if you do not share, then it's no better than the rest.
  • "Sponsor" The difference here is that you guide and teach your new sponsor's on the beauty of the business and it's vast benefit's. Because when you sponsor someone it's not just about recruiting but, showing them the bigger picture and it's potential, that's what you need to achieve. Let them know, how to build the business of their own. And this process would definitely duplicate at the end the day.
So, start focusing on building your organization as the main objective, and not concentrate on selling the products. It may take some time and effort, but Fortune is something that you can definitely find in this business!


Andrew said...

Very informative. Do you promote a network marketing company yourself?

Dee said...

Interesting article Nihal. I have been involved in Network Marketing for nearly 5 years now. I've had my shares of failures but once you understand how it realy works.. it's a great business.

NIHAL said...

Hi there Andrew.

Sorry this reply took a while to come. Have been kept busy on the home front.

Nevertheless, thank you for taking time off to pen me a comment.

If you want a direct answer, then it would be a yes. Have been involved in a couple of them over the years and along the way, I bumped into something that really stuck into my system.

NIHAL said...

Hi Dee.

Thanks for coming by. It's nice to have friend's visit once in a while.

And for your comment, couldn't agree with you more. Ya, Network Marketing is a great business, and with dedication and perseverance, success should be within reach.

Traffic-Master said...

Hi there,
Nice article.I have no problem of understanding network marketing because I am in this field now.

My network is growing everyday.What I am doing now is trying to send traffic to my networking site.

Wish you best of health
Together we achieve success.
Have a great day