What is Network Marketing?

What is Network MarketingWhat is network marketing, exactly?

It depends on who you talk to.

I’m serious!

Talk to someone who joined a network marketing opportunity, learned the ropes, took action and went on to build a wildly successful business that pays them a solid six-figure, even multiple six-figure annual business and they will tell you:

“Network marketing is the greatest opportunity in the history of mankind for the average person without a lot of money to invest to become financially free.”

Talk to someone who has joined a few different opportunities over the years but who never really got in and “did the work” required to build a business and they might say something like this:

“Network marketing doesn’t work. The only people who make big money are the people who get in early.”

So who is right? And if you think about it,  neither really answers the question: “What is network marketing?”

What is Network Marketing?

According to Wikipedia, network marketing is way of doing business in which a sales force earns a commission not only for sales of products and services they personally generate, but also for the sales of others they recruit and bring into the business, which creates a downline of distributors and a hierarchy of multiple leveraged levels of compensation.

Whew. What a mouthful.

Let’s break that down into something that makes more sense, shall we?

You realize you will never get rich working for someone else. You also know there are huge lifestyle benefits associated with building a success business:

  • You can pick the people you work with.
  • You can work from home part-time in your spare time.
  • You can pick the hours you work and how much you work.
  • You can give yourself an IMMEDIATE raise through tax savings.
  • You have the chance to literally set yourself financially free.

So you decide to investigate joining a network marketing company because of the low cost of entry and all the training and support you get. But what are you really getting yourself into? What is network marketing, exactly? Here’s the deal…

When you join an internet network marketing company you are “signing up” to represent that company’s product and services and business opportunity.

You “sign up” by making a small investment (usually $500 to $1,500) and by completing an Independent Distributor agreement. You are not being hired by the company as an employee but, rather, you are volunteering to represent the company as an independent contractor, business owner, dealer, representative or consultant. You are awarded a commission based upon the volume of product sold through your own sales efforts as well as that of their downline organization.

In other words, to make money you need to personally sell stuff AND teach your team to sell stuff because you earn commissions on the AMOUNT of product that moves through your new business.

What is Network Marketing? Think Franchise!

Consider a franchise operation like McDonald’s.

McDonald’s is one of the largest fastfood organizations in the world. They have more than 33,000 restaurants that serves more than 64 million people in 118 countries each day.

More than 80% of MacD’s restaurants are owned and operated by independent business owners or contractors.

Now if YOU owned the mother-ship corporation, you not only earn money by selling burgers, fries and shakes from the 20% of the restaurants YOU personally own and operate… you also earn a tiny percentage on all the sales made by the entire organization including the other 80% you do not own or operation. Meaning you are now earning a LEVERAGED income generated by the time, talent and energy expended by the other business owners on your team.

Here’s another way to look at it…

Let’s say you earn a $100 commission for selling a particular product and it takes you two hours of “work” to make a sale. Break that down and your time is worth $50 per hour. Put in a full 40 hour work week and you pocket a nice $2,000.

Let’s also say you have spent some time “recruiting” a few people to join your team who also want the chance to earn $100 per sale and you earn a nice $10 check for every sale THEY make.

Over time you have built a team of 100 people. They each make 20 sales per week – independent of your time and effort.

  • YOU = 40 hours, 20 sales, $2,000
  • TEAM = 4000 hours, 2,000 sales @ $10 each = you get $20,000

See the magic? You get paid on the time and effort of other people. This is leveraged income versus linear income.

So perhaps a good way to answer the question: “What is network marketing?” would be quote J. Paul Getty, one of the richest men in his time:

I’d rather have one percent of the efforts of 100 people than 100 percent of my own efforts.

What is Network Marketing? The Reality…

Here’s the unfortunately reality, however.

No matter how you slice it, the only way you will ever build a highly profitable network marketing business is to be willing to MASTER the art and science of sales, marketing and leadership. Because MLM is form of “direct sales” and no one makes a dime until products and services are sold. It’s that way in every business, not just network marketing.

So the KEY is to join a company, track down who is currently enjoying a level of success you aspire for, find out what they are doing… and simply be willing to DO the same things. Which, of course, may require you learn new skills and actually a few things (sales and marketing) you are not comfortable doing in the beginning. So what is network marketing?

  • Network marketing is a career choice and a profession.
  • Network marketing is a path to fame, fortune and time freedom.
  • Network marketing is a leadership development platform.
  • Network marking is fun, fast and exciting.
  • Network marketing is a proven “million dollar” business model.

Bless and be blessed,

Rob Fore

PS – Over the years we have built THREE profitable network marketing businesses using a Simple 3 Step System for Success. Now it is your turn…

Comments

  1. says

    Hats of sir for your golden creation…..
    hello sir, i’m Abhishek, i’m a network marketer in eBIZ.com.pvt.ltd. I have lots of dream, and i want to give proud to my family… i’m 19 aged, besides network marketing i am a B.tech student. :) so plz u give some success tips for growing me business….

  2. says

    A lot of people are discouraged in joining network marketing due to the idea that it really requires selling and marketing skills. There are a lot of reputable companies and aside from great products, they also provide amazing support, training and tools.

    It is possible to achieve Financial freedom yet it is not as easy as building a web site and expecting leads and money to immediately commence rolling in. It requires persistent, consistent and DAILY effort. The business mindset is at the core of all the things we do in our business. If we do not posses a business mindset, then we will have little success in network marketing.

  3. says

    Thanks Rob for taking the time to peeling off some of the layers that is blinding people who could become great network marketers if only they have the chance to really understand our industry :-)

  4. says

    Hi, Rob Fore. Great article. It’s right time for me. I joined to Forever Living Products, network marketing company and so appreciated to them of their products, it’s help me to improve my health condition. So here I am looking some information on network marketing, now I hope to improve condition of my wallet. Very helpful post and comment too. Thanks.
    It’s my first comment in English.

  5. says

    Network marketing can be a good way to create your business. In fact, we are doing that with one business partner that we work with. By creating a group or a “network” of positive people who share vision and goals and most importantly support your business, you are on your way to growth.

    I do however, believe that Network Marketing itself, if you practiced that, must be systematic as much as it is directly based on the value of the product now on “you trying to sell it”

  6. says

    Great article. I personally view network marketing not as a business in itself but as a tool to expand the business that I already have. So, the concept is the same but the business model is not necessarily a network marketing business. For me network marketing is a system, tool or technique to success in business.

    • says

      Hi Amy, thanks for stopping by and sharing your perspective. NETWORKING is a valid marketing technique, but that is far different than a “network marketing” model as we are talking about here. In this case it is actually type or method of product distribution. Been around a long time. Think Amway…

  7. Ken Poirot says

    Thanks for your article. I am also a member of Empower Network and I promote another opportunity as well. I found if you find something that is simple and repeatable you can make a great living working from home.

    You are amazing – great looking page, great content, great pop up, and ranking. Very impressive what you do Rob.

    • says

      Thanks for sharing, Ken. Appreciate feedback and you are right – simple and repeatable is good thing. We call that modeling.

  8. Mahogany says

    I really like the sincerity and honesty from the author of this post. Network Marketing can prove to be very difficult for most including myself in the beginning. Once I learned certain marketing skills and how to properly apply them, it made a world of difference. Having a good product is a big part of the equation as well. I have failed at many NM attempts and found success only when I coupled acquired marketing skills with great products. I’m currently marketing products and services everyone uses everyday and this has made all the difference.

    • says

      Offering products that sell in the “real world” is critical. The challenge is most network marketing products have the commissions built into them so they tend to be MORE EXPENSIVE than similar products offered in the open market. If this is the case, you will suffer a lot of attrition because people will NOT continue to purchase products that cost more if they are not making a profit.

  9. says

    I love this quote “Network marketing is the greatest opportunity in the history of mankind for the average person without a lot of money to invest to become financially free.” It gives everyone a chance to be in the top 8%. I also Just picked up your Posting on Purpose training and loving it! I would recommend it to everyone that is looking to take any business online. Thank you for all your knowledge.

    Jesse

    • says

      Thank you for the wonderful feedback, Jesse. Appreciate it. It really is a simple matter of LEARNING, then APPLYING on a consistent basis over time. Fun stuff.

  10. justinmh3416 says

    Thats Rob Fore:

    I have seen you live on occasion and you always deliver when it comes to helping others. Looking forward to your next post.

  11. NathanRoyse says

    @JessicaAre you tired of being ONE OF THE MILLIONS of home Marketing? You should join a company that will make you ONE IN A MILLION.. with the potential of making $500K in 12-18 months!! Go to http://www.nathanroyse.myhealthybeverage.com to learn more and I will PERSONALLY contact you in 48hrs or less!!

  12. Opvious says

    Rob Fore ross272_ross Really? Because the Direct Selling Association claims that the average annual income for direct sellers is $2400, with 8% of sellers earning $50 000 a year (http://www.directselling411.com/glossary-and-faq/selling-faq/). So I’ll keep my stable, certain corporate slave salary and y’all can continue to chase your tails in the hopes that maybe, just maybe, you’ll be one of those 8% earning an income that will put you in the top bracket of the working classes.

    • says

      Opvious Rob Fore ross272_ross - yep, you are absolutely right, which is abou the same number of people who make the top incomes in the world. The MAJORITY wind up retiring broke after working 40 years for someone else. Those who don’t usually own their own businesses. So good for you for sticking with your plan. I’m confident it will work out for you well.

  13. says

    ross272_ross – Ignorance is not bliss. When you join a network marketing company you are signing up to be a product/service distributor. You make money based on how well you distribute and move product and everyone who joins starts at the top… of their own business. The very first guy or gal who joins the company has the EXACT same opportunity as the guy or gal who joins 10 years later… distributor #5 bazillion.

    • says

      PatrickCurl – gotta love it. Consistent action over an extended period of time. That is pretty much all it takes to product awesome results in ANYTHING.

  14. PatrickCurl says

    Great post Rob, that’s one of the reasons I joined MLSP under you – you always have good advice!

  15. ColtonBridges says

    So here I am looking for some info on network marketing and I found someone I knew on the front page..Haha Your awesome Rob!

  16. ross272_ross says

    Networking marketing is scam plain and simple. All this “you must do this you must do the work” is just another part of the hype. Do yourself a favor and unless you are number one or two on the pole steer clean of them

    • Don Walker1 says

      @ross272_ross Ross, I would have to disagree…you see…as this comment came in and I am answering it…It is 1:55 p.m. MTN time where I am and I am creating a Powerpoint Slide Presentation In Video Format For The Topic “What Is Network Marketing?” What will come of this, you may ask? Well, I am using keyword research tools so people can find me, so I can help them, (Like Rob Fore Has For Many) and to dispell the myth that people who actually work hard and…”smart”…can really Make It Happen and Online for a lot of leverage…Let me explain…I receive emails through autoresponders from all parts of the world and from all times of the day and night…As for Doing this and that in Network Marketing and Sales…I am a proven 6-figure earner in the Offline Market…I converted to the Online Market to create Leverage….and thus….having to start from “ground zero” and under Rob Fore’s Tutelage…I will say this for the record to not just give him credit, but also to protect his proven track record in the midst of many calamities…”He is successful because he does not complain and has proven to be a Leader in the industry…Meaning, this is the secret to Success…Step Up, Be Bold, Think, Don’t Complain, Take A Lot Of Action, And Adjust Accordingly…Network Marketing may not be for you….”However”….it has worked and still is…and will continue to for those that do the work…God Bless…

      • KarlHenshaw says

        @Don Walker1  @ross272_ross Inspirational Comment, makes me believe that I am on the right track. Thanks Don, The Key to Success in anything in Life is Persistence, Always was and always will be. I Do not know your story Ross, but One thing I do know is to have such a negative attitude towards Network Marketing you must of had a very bad Mentor. This game is not meant to be easy, that’s why the rewards are so high. I’m new to this game, but I’m determined to learn from the Best and Never Ever Quit. Good Luck Don and Ross whatever you do in future.

    • says

      @ross272_ross Ross – ignorance is not bliss. Network marketing has been a proven, viable business for over 40 years now here in the US. The biggest scam of all is to give away the best years of your life working to build someone else’s dreams. But, then, again – if everyone ran their own business and created a wonderful lifestyle… there would not be anyone left to serve tables, fix cars and stuff like that. So keep doing what you’re doing. We need you…

  17. TeutaSh123 says

    Hi Rob,
    Network Marketing seems to good to be true. Are the profits really six figures or will i get started and be very disappointed with the results? I want this really bad, but i am very unsure.

    • says

      If you are asking this question – frankly – you probably are not ready to build a profitable business because if ANYONE has great results, YOU can have those same results yourself if you are willing to get in, learn what you need to learn and get busy.

    • says

      @TeutaSh123 Like any business, YOU get exactly what you put into it. There is no magic to the money being made (or not made) with network marketing. You get in, you learn how to build a business and you build it. MOST don’t – so most are disappointed. But they should be disappointed with themselves, not the industry.

  18. oshaqur says

    Network Marketing is a special breed.  It takes a special person to be successful at.   Where else can you go and make it big or lose big.  
     
    Networking sure has changed in the last couple of years.  I like the positive people you come in contact with.  
     
    Now,getting leads that’s a skill set and the quicker you figure out what works the better.   Mentoring and training.   
     
    Hey, check out the Miami Heat Doing the “Harlem Shakes”
     
    Would you like to see another SHAKE?  <a title=”Empower Shake” href=”http://www.setting-up-an-online-business.com/t/recommends.html” target=”_blank”>click here</a>

  19. dave says

    Rob, one of the things that gives network marketing a bad name and has given NM a bad name over time is false information and poor business practices from other people who are in NM and should not be even involved to begin with. One particular person who I listened to recently was Tim Sales..What he had to say was excellent!

  20. dave says

    i dont think i could have said it any better Rob! I sold cars at one time and I do recall they never sold themselves until I showed it and sold it.

    • says

      No kidding – have you ever noticed there are a few select souls who tend to think it is easier to pull you down than it is to rise up to your level. Too funny…