What is network marketing? The respond to some extent depends on who you speak to. Whilst prosperous network marketers will tell you that it is the best way to do business, the detractors are likely to pronounce the view that it doesn't work or that it is illegitimate.
So what exactly is this way of doing business? plainly put, network marketing is a enterprise model that allows associates to sell their products directly to the end consumer straight through a network of independent distributors. Unlike original retailing, it operates a much simplified distribution system, where the seeder effectively replaces the functions of wholesaler, marketer, retailer and all the other channels in the original retailing chain.
Buffet Stands
As an independent distributor, you can expect to earn in two ways:
- by retailing the products yourself
- by earning override commissions on the sales made by the distributors you sponsor
Some of the reasons for the popularity of this enterprise model include:
1. The power of leverage
With Network marketing, your efforts are duplicated and you not only earn an earnings on your sales but also on the sales of other distributors in your team. By way of illustrating the leverage offered by Mlm, let's do a straightforward calculation.
Let's assume you can only work 10 hours a week on your network marketing enterprise and for each hour, you earn . If it depends on your efforts alone, you would only generate 0 a week income. Now, let's assume in expanding you earn 10% commission on the sales generated by the citizen you introduce to the enterprise (your team) and you have a team of 5 individuals, who also put in 10 hours a week each with similar results as yours, you will earn an extra 0 x 5 x 0.10 = 0 each week production your weekly total 0. This additional 0 a week from your team is often referred to as residual earnings as it doesn't depend on your direct efforts or your ability to work. It also follows that the bigger your team or downline, the higher the amount of residual earnings you can earn.
So potentially, if you build a solid Mlm business, you stand to earn that sort of passive, residual earnings long after you stop working so long as you have an active downline and meet a minimum qualification criteria (usually a minimum buy requirement of around 0 a month although this varies from enterprise to company).
2. Limited risk
The introductory start-up costs to join most Mlm associates is normally much lower than beginning a original business. Your operating costs in general consist of your monthly auto-ship which varies but is normally around 0.
3. Simpler to run
With Mlm there are no employees to consider, so you are able to handle most of your paperwork. You just need to keep your own financial records for your tax return. This frees you up to spend your time and vigor production money.
Let's not also forget that with Network Marketing you are in enterprise for yourself but not by yourself. You will be part of a network marketing enterprise that has a proven and tested marketing theory unlike original enterprise owners who are very much on their own.
4. Whatever can rise to the top
Mlm is truly an equalizer as Whatever can join and unlike original organisations, the top is open to everyone. The buck stops with the distributor.
5. Expert development
In my opinion, some of the best attributes of network marketing consist of the fact that it revolves around developing your enterprise skills as well as your ability to connect with others.
Now let's look at some of the criticisms levelled at network marketing:
1. Network Marketing is illegal
Without even delving into the legal side of things here, I will just mention that financial luminaries like Richard Branson, Donald Trump, Paul Zane Pilzer and warren buffet all embrace network marketing some of them even own Mlm companies. Is there something that their team of legal experts are missing?
2. Network Marketing is a pyramid project / a ponzi scheme
Let's face it a pyramid is the natural shape of any organisation including governments so it is no dissimilar with Mlm but that doesn't make it illegal. The only similarity that network marketing shares with a ponzi project is the fact that they both use a network. The similarity stops there; Ponzi schemes are illegal and don't work as there is normally no product reaching an end-consumer and investors are paid from their own money or money paid by subsequent investors rather than from actual profits from the scheme's operations. With genuine Mlm companies, no one gets paid unless products are sold to end consumers.
2. Network marketing is a scam
The "Mlm scam" claim probably comes from the fact that as in any industry, there are some unscrupulous Mlm associates out there. Before you join an opportunity, do your explore and taste the direct selling association if in doubt.
In conclusion, I will say that whilst network marketing is not for everyone, it is literally not illegitimate and it is here to stay. Additionally, in modern years many large original organisations have adopted the network marketing model as their main distribution method, which suggests that it is also the way of the future.
Are you ready to give it a try? There are a lot of great network marketing associates out there. Do some explore to find the enterprise that is right for you.
What Is Network Marketing? The Truth Revealed