Network Marketing is a way to distribute a company`s products directly to an end line consumer by cutting out the middlemen.  Instead of hiring a sales force, regular customers are able to refer other customers to the company and earn a commission check to do so.  There is usually a membership or distributor fee involved, but it is usually quite small (around $30) and you should receive a marketing kit, distributor website and backoffice (sales tracking and training).  Oftentimes, there is also a discount on the product from the retail price.

The products in Network Marketing are usually the highest quality products.  This is how they justify charging so much for them.  The more they charge, of course, the higher the commission checks.  The more unique and effective the product is, the more likely it is that you will have a customer that continues to order from you every month and also the more they are likely to pay.

The Reasons for Negativity

There is an inherent resistance to Network Marketing.  I think that there are several reasons for this.

1.  The Monk

I heard this term used at the Millionaire Mind Seminar.  It`s a great seminar by the way!  I think that people have such negative stigmas towards money that they feel awkward making money off of people.  I find this very bizarre.  They do it every day at their jobs.  I guess it`s different because there is someone telling them to do it…  That makes it ok.  People will do it for their boss, but they won`t do it for themselves.  What they don`t realize is that when they start doing it for themselves, then they don`t have to pay their boss to tell them to do it.  =)

2.  The Blind Leading the Blind

I`ve used this analogy a million times.  I think one of the most devastating problems in Network Marketing is the lack of trained distributors.  I don`t mean that there`s no training available.  There is some amazing training out there and it doesn`t take long to find it.  I think that the tools aren`t the problem… I think that it is the overall mindset that needs to be taught.  Nobody likes a pushy salesperson and normally that is because you are trying to hard to convince.  Remember that instead of selling… You should be helping people buy.  People don`t like to be sold, they just want to buy.

3.  The Family Trap

There are people that are so desperate to succeed and so disillusioned about what it will take to get there, that they recruit their whole family.  Now they have an army of unqualified, unmotivated and unsuccessful “distributors” led by and untrained YOU.  Sure, you make a quick buck, but when everyone realizes that you are the only one that made money, and they have no one else to talk to, the whole thing collapses and everyone is very unhappy!  You may even go on to succeed because of those early gains, but at what cost?

4. The Hype

The bottom line is that you are simply a customer.  There is lots of “hype” and “love” in these companies but remember… This is simply to create a sense of community (ie: cult) in order to enslave you into purchasing the regular auto-ship.  I think it is very important to participate, but don`t get too wrapped up.  If you are not making money, you really don`t want to buy the products…  and you aren`t really learning anything from your sponsors… then get out.   Don`t let them make you feel like you “owe” them anything.  This is a business… this is YOUR business.  Make it profitable.

How to make it work for you

Success comes with challenge.  I think it was Jim Rohn who said don`t wish you had less problems, wish you had more tools.  Network Marketing is not for everyone.  It may be simple in concept, but it is certainly not easy to execute successfully.  For many people it is the way out of the rat race.  You work basically for straight commission so you have no salary to fall back on and you have no boss to tell you what to do.  You have to be self motivating and persistent.  I think that above all you need to work smart.  Find strategies that work and avoid ones that don`t.

There are a few things to take into consideration when you are thinking of getting involved in Network Marketing.

1.  Find your Sponsor

It is YOUR responsibility to choose a sponsor, so do so carefully.  Many people (like me) fall into Network Marketing by chance.  There is nothing wrong with this, but just recognize that the person who sponsored you may not be the best “success coach” available.  After all, we become who we model.  If you are “following” your sponsor and your sponsor is unsuccessful, then you will probably be unsuccessful as well.

2.  Leave your family out

If you are like me then you don`t want to lose your friends and alienate your family when you go into business for yourself.  Here`s a tip.  Don`t recruit your friends or family unless they practically beg you to join.  I encourage you to promote your products and business, but let them come to you.

3.  Track your results

I strongly suggest a time tracking and an activity tracking strategy.  You don`t necessarily need to buy anything, but make sure you define your “work hours” and make sure that you keep track of how many people you are contacting as a ratio to how many sales you are making.

If you know how many people you contact, then when you make your first sale you have a ratio.  If you have presented your product to 10 people and you make one sale, then it is reasonable to assume that within the next 10 presentations that you will make another sale, and so on.  It is also reasonable to assume that the ratio will improve as you get better.  The ratio will become more accurate as you do more presentations.

4.  Find the Right Marketing Strategy

Your marketing strategy will largely depend on what kind of product you have.  If you have a product that people are already looking for then you are going to need to find a way to intercept the buyers who are looking for your product.  Internet Marketing is a natural way to accomplish this since people are searching for your product.  You just need to attract the traffic to your web sites.

If your product is something new and unique, then you need to get out there an educate people about it.  In this case maybe parties are the way to go.  Make sure you create a fun, low pressure environment.  Have games and prizes and promote the “event” instead of your product.  This will ensure the largest participation and therefore the more potential customers.

There are many other strategies to get the word out.  Here are a few.

• Trade shows
• Purchased leads
• Networking events
• Generated leads through Internet Marketing

Tax Advantages

One of the most overlooked advantages of Network Marketing is the tax advantages available to the self-employed.  This is especially true if you already have income from a job.  Your business will likely incur some costs such as increased phone bill, business materials and office equipment.  However, the most important thing to take into consideration is that when you use your personal belongings (home/apartment, car, computer, etc) to earn an income in Network Marketing, then those expenses can be deducted from the income earned in your business as well as your job.  This can mean a very significant tax return at the end of the year.  I suggest getting a good accountant that has experience and knowledge with small business… especially Network Marketing, direct sales and/or MLM businesses.  The accountant fees are also tax deductible.

Conclusion

In the end, this is a business.  There will be ups and down but the important thing is to make sure you maintain balance.  As with any people business, you will encounter adversity.  It is important to remain focused on your goal while remaining ethical and true to yourself.  I suggest writing a mission statement.  When you can clearly state your mission then you can use it as a compass for any major decision.  If a choice violates your mission, then the right decision will be clear.