The power of Network Marketing lies in building a “Network” and not in selling products. Our job is to communicate information and to tell great stories while building a big network. We are the messenger and use tools to pass on the massage.
The focus in Part 1 of this blog post: What is Network Marketing and how does it work? is on understanding “What is Network Marketing” and in Part 2 we will see …
How does Network Marketing work?
When we go a few years back in history and have a look at people like Bill Gates and Jeff Bezos and really understand what they have done, we will realize that they built strong “Networks”.
Bill Gates hasn’t invented computers; he built the operating system for them which than went viral. Jeff Bezos didn’t publish books with Amazon; he created a very powerful online network which distributes books.
None of us of course is like Bill Gates or Jeff Bezos who created amazing networks from scratch but the network marketing companies give all of us a chance to build our own network rather than spending our lives to build somebody else’s network.
How Does Network Marketing Work – Word of Mouth Marketing
Network marketing is not a get-rich-quick scheme; it is rather a serious business model for serious people.
Network Marketing is using mouth-to-mouth marketing which can be compared with the concept of how rumors spread … one person tells something to 5 of their friends, these five tell this to five of their friends and so on … soon a lot of people have received the message which that one person spread.
One main reason why network marketing works is due to its mission of helping others to build a business while each person leverages their time and efforts.
It’s a business that is available to anyone and any person can become a top earner. In contrast to a corporate workplace, everyone in Network Marketing has an equal opportunity to reach top ranks and a top income.
We all do some kind of word of mouth marketing every day. Don’t you recommend products, services or anything you like to your friends every day? I am sure you do! Haven’t you told all your friends about that great movie you saw in the cinema or TV recently? The only thing you didn’t get for these recommendations – you didn’t get paid for it!
This is exactly what we do in network marketing – we recommend our products, services or our business opportunity to our friends, family and others in our circle of influence but – we get paid for our efforts.
If we are looking at Who is around us or with Whom do we work together, there is another hugh benefit – we can chose the people we want to work with. When you are working as an employee you have to deal and get along with the people who are working at your work place.; if you like them or not.
Network Marketing is a “People´s Franchise System”
Do you know how Franchise is working? If not, let me explain it briefly with the example of McDonald’s as the biggest fast-food chain in the world.
McDonald’s has more than 35.000 restaurants worldwide and more than 80% of them are owned and operated by independent business owners and a little less than 20% of the restaurants are owned by the mother company.
There are two income streams. The first one comes from the sales of burgers and fries which is done in the almost 20% of their own restaurants and the second one from a small percentage on all the sales made by the other 80%.
Network Marketing works similar but instead of restaurants in the chain it works with people – so we can call it “people´s franchise”.
Let’s say you earn a commission of 100 € for selling some products directly to your customers. You also have recruited a few people to join your team who also want to earn 100 € for selling products to their customers. While they earn their 100 € – at the same time you earn a small percentage on each sale they made.
In other words you get paid on the time and effort of other people and get a leveraged income versus a linear income.
My favorite quote is:
Leverage and Duplication are key in Network Marketing
The real key in Network Marketing is “Leverage” and “Duplication”. You can leverage your time and increase the number of work effort for which you also get paid by gaining other people to join your network and earn a small income on their efforts, let’s call it “team effort or team commission”.
Successful people in network marketing build their business in a very organized way. They work a few dedicated hours each week – some people also do this full time -, where each working hour serves as a building block for their long-term business growth. At the beginning of their networking career they sell their products directly to their customers and then find other people to join their network. The next step is teaching the new people how to sell the company products and how to gain more people who duplicate the process.
By helping other people to become successful and showing them step-by-step how it all works you duplicate yourself. As this process continues, you create compound growth that can lead to hundreds or even thousands of people joining your business. You leverage your time by helping others to be successful and earn an income from all their efforts.
Network Marketing is not about selling products
Many people think that Network Marketing is all about selling products and being a great sales person. That can´t be true! As stated before, one of the keys for success in network marketing is “duplication” and sales is what you can do because you have these skills but duplication is what everyone can do!
The most successful people in network marketing are not sales people, they are typically teachers, coaches and moms, people who like to help other people and who are great in story-telling.
Network Marketing is about sharing information and not about hard core selling. You need to care about other people and help them to become successful.
What is Network Marketing and how does it work
Robert Kiyosaki brings it to the point in his book The Business of the 21st Century when he says: “Network marketing businesses are genuine Information-Age businesses, because they deal not with land and materials, factories and employees, but with pure information.
As a network marketer, you might think your job is to demonstrate and sell a product. It’s not. Your job is to communicate information, to tell a great story and build a network.”
In Network Marketing, no big upfront investment is required – we are talking her of a few hundred to about one thousand Euros -, and depending on your company; there are also little geographical limitations. There is no special education needed but you definitely need skills. Skills like having a lot of self-confidence, having to withstand rejection, being a good networker, communicator and story-teller, but these skills are available to everyone and can be learned.
As a network marketer you are usually self-employed. Therefore you can benefit of the tax advantages of a business owner. Since it is a people business you will also expand your circle of friends. In this business you can also travel, have a lot of fun and enjoy the lifestyle that the extra income will provide.
Since network marketing is an Information-Age business model – this is where we are today – more and more people using sophisticated marketing methods like the Internet, bringing their business online, conference calls via Skype, Zoom or Facebook to extend their network across the world.
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