Essentially, network marketing is a method of distribution where individuals recommend a product to other individuals, they contact the manufacturer and place an order, and the product gets directy shipped to them and you receive a referral commission on that sale. That is why network marketing, or MLM, is also commonly called direct sales.
In the traditional product distribution model, manufacturer takes large orders from retailers, for inventory to stock their shelves, and ship the product to them along with marketing materials, then the manufacturer takes out expensive advertising hoping you come across the ad and then go to the retailer to get the product (this is a brief, simplified description that doesn't encompass the entire traditional distribution process). Please see the below visual diagram and refer to the FAQ.
Network Marketing FAQ
Can Network Marketing by done successfully part-time?
Yes, both part-time or full-time. It is totally dependent upon you. You can start your Network Marketing business on a part- time basis without jeopardizing your current source of income until your business is generating the income you desire. Not only can you start on part-time but you can continue to operate indefinitely on a part-time basis. It is your business. You call the shots. Nearly ninety percent of men and women in this industry work their business part-time. What would you do if you were financially independent and most of your time was free to do with as you pleased? This is why so many people are flocking to Network Marketing.
Is door-to-door, holding parties, or conducting meetings part of Network Marketing?
If you want to, you can integrate these proven techniques. It is your business. With today's technology having the ability to build 100% online, these personal, face-to-face techniques blend really well with the Internet component of modern network marketing.
You can be as creative as you desire as long as you stay within company guidelines. A wide variety of proven methods are available to achieve success. You decide what is comfortable and what works for you - mailing postcards, distributing catalogs, telemarketing, meetings, one-on-one, in- home parties, fundraisers, commercial accounts, and so on, or you can stay at home and work from the computer. You will definitely meet new people both in person and online, because I have never seen a product hop off the shelf, walk down the street, and jump into a customer's arms. You are going to have to do the part of bringing the customer to your website, or bringing the website to your customer. Remember, in Network Marketing, not one penny is earned until a product is sold as it is with any type of business.
Is Network Marketing a pyramid scheme?
NO! Granted, on the surface, Network Marketing and pyramid schemes share some similarities; however, there is a significant difference that makes pyramids highly illegal. In pyramids, income is created solely by recruiting others into the pyramid. There is little or no emphasis on product or service movement, therefore no value flows down the system. You purchase the right to recruit others into the scheme. This is illegal. In pyramid schemes, those who get in first and who are at the top win while everybody else loses. The pyramid title came from people who were uninformed and the way the organizational chart was drawn -in a pyramid. If one looks at the organizational chart of ANY corporation, it, too, is in the form of a pyramid.
In a legitimate Network Marketing company distributors are paid on wholesale and retail product movement - not on recruiting. The compensation plan is based on the training and managing the marketing team. In Network Marketing, no matter where you are positioned or when you join, you can advance to the very highest income levels and even make more money than those above you in the network or your sponsor.
I cannot sell so, is this probably for me?
So what! We do not sell. This is the 21st century! Purge your thinking of archaic, 40 year-old methods that do not work. Network Marketing is not about selling - not at least in the way most people think of selling. There's no place for arm twisting or high-pressure techniques in Network Marketing. You consider a physician or lawyer professions. We are professionals, too. We are proud of the industry, company, and the people - both customers and associates. Network Marketing is a conversational business about sharing the concepts and products of a Network Marketing company that you use and you are excited about. You could call it a international conversational distribution system. That is all you are doing. Talking with people. Does anyone truly believe they have to convince, high-pressure, or arm twist someone about the benefits of good health? The general public perceives doctors, lawyers, and company presidents as professionals and having extraordinary incomes. Do you know what profession boasts of having the highest number earning over $100,000? Doctors? No. Lawyers? No. The sales profession.
Can I make a lot of money?
I really do not know. How much do you want to earn? How much effort are you ready to spend? Remember, there is no ceiling placed on you in the Network Marketing industry. It is “the sky's the limit” and “as fast as you can get there” philosophy. You get out of it what you put into it. If you ask for a little, you will get a little; ask for a lot and you will receive a lot. It works if you work. Look at it this way. Does your present job work by itself if you are not there? Here you are in absolute control - it's up to you how far and fast you take it. You are grasping the steering wheel and your foot is on the gas - what are you going to do? Remember, the income you create in Network Marketing is residual. That means that for the work you do today, you have the potential to earn money not for today gut for years to come.
Do I have to sponsor tons of people to be successful?
No, not technically. Not if you focus on referring business builders. You could develop a strictly retail business should you desire of just customers ordering products. Remember, you do what you are comfortable with. It is your business. You can make an extremely handsome income with retail alone, as every single re-order from customer earn you a residual commission; however, the big money is made by building a network of Leaders, who build their own customer and leader base. Let the natural power of the concept work for you. That way you will not have not have something that resembles a huge paper route and you will be building security. What happens to your income if you cannot service those customers? With strictly retail, your business controls you. With depth, you control your business. If you can consistently sponsor just one person a month or two into your organization, you can do can build an enormous Network Marketing organization.
What is so important about referring Leaders?
Forget how intelligent, rich, energetic, or dynamic you think you are - you are still limited by the same 24 hours a day. Referring business-building Leaders overcomes this severe handicap. It allows you to duplicate yourself and have dozens, hundreds, even thousands of people working indirectly on your behalf on their time. You receive a percentage of everything they do. J. Paul Getty once said he would rather have one percent of a hundred people than 100 percent of himself. Would a teacher's eyes sparkle if they knew they would receive one percent of the lifetime earnings of every student they taught? Enrolling Leaders builds security in this business. Why? In most traditional business, what happens if you become ill or disabled and are unable to service your customers? Maybe you simply want to take a nice long vacation? For whatever reason, you could lose most if not all of your income overnight because it relies on you being these. That is not owning your life and it is certainly not financial freedom. People have a gross misconception that doctors and lawyers have it made because of their high incomes. What happens if a doctor does not show up at the office? Do his patients still send in money? I do not thing so. In network marketing, however, this is true. If you do not work today those in your organization are working for themselves and you receive a portion of their efforts. This is definitely a win-win situation for everyone involved.
By referring Leaders, and building a downline in network marketing, you can create total financial freedom. With a downline of independent business people working for you, your eggs are no longer in one basket. Do you have all your money tied up in one stock? I hope not. Each person in your downline has a vested interest in continuing and building their own businesses. You create an income that is not dependent on you - an income that can continue, even grow, indefinitely with or without you and in spite of what you do.
Do I have to stock and deliver products?
Do not worry about backing the cars out of the garage or converting your living room into a warehouse. That is another outdated concept. Good Network Marketing companies today allow distributors (this is extended to retail customers if they use sophisticated computer software) to order directly from the company using credit cards. The company tracks commissions, credits your accounts, and automatically sends you profit checks (or direct deposists to your bank). You could have a business where you never see or handle the product, just the checks from your efforts. And, if you so choose, you can personally deliver the product. That is another facet of this business. It is one-on-one. You build a trusting, caring relationship with your customers. It is not the same as walking into a mega-discount store.
Is Network Marketing another get-rich-quick scheme?
There is not such thing as “get-rich-quick.” Anything of value takes time to develop. Sure, there are a few exceptions to that rule and they are extremely rare. In fact, if overnight riches is your dream, your odds are probably better playing lottery than doing it in business - any business. You better look elsewhere. We do not seek tire-kickers or flash-in-the-pan type folks. We ask that should you decide to register with us, plan on dedicating a few hours per week for at least a year to get into a growing, monthly, reliable residual income.
Is Network Marketing a real business?
Do a reality check! Get with the real world. Network Marketing is a very real, multi-billion dollar industry involving millions of people throughout the world. Major corporations like Microsoft, Amazon, Gillette, Sprint, even automobile dealerships to name a few, employ the concept. It's a rapidly growing international force, with thousands of companies worldwide realizing it is the most cost effective and powerful way to move products from the factory to the consumer without incurring high middleman costs and delays. You, the independent distributor, sit between the manufacturer and consumer and reap the profits.
If Network Marketing is so great, why aren't more people involved?
If doctors and lawyers make so much money, why aren't there 300,000,000 people in those professions? It can be summed up in one word: misconceptions. The general public just does not understand the Network Marketing concept or its potential. That is changing rapidly!
Maybe they rely on financial losers, friends, and co-workers for advice on how to become wealthy. Perhaps someone has not been considerate and discussed this with them. People do what they want to do. They have set priorities and maybe Monday Night Football, the Simpsons, and One Life To Live take precedence over building a secure financial future.
What are the costs in starting and operating this kind of business?
Virtually all Network Marketing companies require the to purchase some type of product. This cost is usually less than $100. With the advent of the Internet, the need for "Starter Kits" is eliminated.
As with any kind of business out there, you will have monthly expenses for a website, office supplies, Internet, advertising (both online and off), etc. A total of $100-$150 dollars per month is probably a realistic expenditure to expect. Anyone can afford this amount of money without jeopardizing their current lifestyle while they're working to build a better one. The good news is most, if not all is tax deductible. If you cannot make this type of a dollar or time commitment, then you should not attempt the concept at this time.
What if I can't afford to buy extra products?
That is not the way reputable network marketing business do business. You are not required to stock products you might not sell. Network Marketing companies want you to replace those products you now buy elsewhere with the equivalent but higher quality products your Network Marketing company manufacturers. By doing so, you will save money since you now get to buy wholesale. Plus, it only makes sense to buy from yourself - to buy from “your own store.” Modern network marketing operated on a "per sale" direct to consumer basis.
I tried Network Marketing before and it didn't work. Can it work for me?
Welcome to the club. So what! Did your parents set an upper limit to the number of times you could fall down while learning to walk before they made you crawl for the rest of your life? Suppose you have a cold burger at a McDonald's restaurant. Does that mean you will not visit the other 9,999 restaurants? Of course not! You do realize you will drown in an inch of water if you keep your nose in it.
Of course it didn't work for you. It is not supposed to work - you are supposed to work it. Perhaps you were dissolutioned when great wealth didn't materialize overnight. Somethimes that does not happen. It is called delayed gratification. A farmer doesn't plant seeds and expect to harvest they following morning. Expecting a business to work without making any effort is like saying to a fireplace that you'll throw on wood when it delivers heat.
Network Marketing is no different. There are fair Network Marketing companies, great Network Marketing companies, and, yes, even some bad Network Marketing companies. But Network Marketing works! You need to align yourself with the right company. We happen to believe CTFO™ presents the finest opportunity available that merges 100% free online network marketing team building with exceptional corporate support and live training. Click here to learn more about CTFO.
What if I don't have the cash right now to get involved in Network Marketing?
Read these three words: Find The Money. Sell your tv, old furniture, borrow from relatives, or have a garage sale. Do whatever it takes to get the necessary funds. If you were $1,000 short of what it takes to move into your dream home, would you somehow get the money, wouldn't you? You would have found the money to purchase Facebook or Google stocks. Network Marketing is an investment in your future.
I can see how others have become successful, but what if I don't think I could do it?
There you go, selling yourself short. That kind of response smacks of low self-esteem. People have been conditioned to believe only a selected few can be successful. Their position in life is a sheep being lead around by a shepherd. That is as far from the truth as possible. People don't know what they are capable of doing. People of every ages, every background, from every walk of life, from college students to retirees and corporate CEO's to maids, are making big money in Network Marketing. If you have a strong desire and a dream, you can succeed in Network Marketing.
If I would happen to be sponsored by someone across the country, how do I answer their questions?
Do not burden yourself with the details. Free consultation and assistance from your sponsor, other upline associates (and often the corporate staff of your Network Marketing company) is a phone call away. Corporate operators, webinars, conference calls, email, and other technologies also provide fast and efficient communications between company, upline and downline . . . no matter where they're located.
What if I'm too busy and don't have the time to start a Network Marketing business?
That is exactly why you should consider Network Marketing. Besides creating financial freedom, Network Marketing is specifically designed to create personal freedom for you so that you can do all the things in life you really want to do that you don't have the time for now. If you don't have the time to start now, when will you have the time? You don't find the time. Extra time does not hide under the table or carpet. If it is worthwhile, you will MAKE THE TIME. If you don't have the time now, when will you have the time?
Don't you have to get in at the beginning to make any real money? Doesn't saturation eventually occur?
There another big misconception perpetuated by the media, wives tales, and word-of-mouth for years. There has never been any evidence produced that “saturation” occurs in Network Marketing. This very topic was debated in U.S. courts and that was the conclusion by the courts.
Secondly, realize that because Network Marketing is still a very young industry, there are BILLIONS of prospects worldwide who have never heard of Network Marketing. It will take DECADES to even make a dent in that.
But here is the primary reason why “saturation” is a myth: Timing. In the U.S. there are tens of thousands of new prospects “hatched” every year. Part of that figure are young adults who have reached the stage in their lives where they would consider (and could afford) to start a business. Then there are the thousands who have recently experienced a major shift in their lives because of changes at work, at home, etc. These same people, who just months before could not be considered prospects for Network Marketing, now are suddenly very receptive to the opportunity. Every day more people realize the limitations in their jobs, and every month more young people are getting married and looking for new opportunities. This is happening constantly. Only a tiny portion of the market has been touched. The most concentrated location has only five people per thousand on the product. To determine whether saturation exists, check the yellow pages each year and count number of lawyers and physicians listed. The truth is that Network Marketing is wide open and the potential is enormous.
Can only select few make money in Network Marketing or MLM?
Unfortunately, the truth is very few people succeed in ANY endeavor. Most people simply will not do what it takes to succeed. Network marketing is no different in this regard because it mirrors human effort. Many people get into network marketing with the idea that it's some kind of “easy road to riches”. It's not. It takes work. It takes time and dedication. People become disillusioned because their sponsor might have misled them with rosy predictions of overnight, instant wealth, or because they chose to hear the easy story. They become enraged when confronted with the “w” word -WORK.
People want something for nothing and quit when they don't get it. They will typically say “I tried it for a week and it didn't work, therefore it's a scam!” This is NOT a fatal flaw of network marketing but a reflection of real life. Just like electrons, people always move down the path of least resistance.
What does the average person do? The average person quits at anything they attempt. 90%+ of all small businesses fail within 1-5 years - and the owners lose much more than the few hundred dollars a network marketing person typically invests. 98%+ of corporate employees will never achieve executive levels. Look at your JOB. You work 40 hours per week for 40 years for someone else and what do you get - a gold watch, a matching set of BIC pens, maybe a “Thank you,” and maybe nothing. Remember, 95% of 65-year-old retirees in the US (according to recent insurance & Social Security statistics) are dead or broke.
Why is this so? The biggest problem with network marketing is that it's simply “too easy” to get into it (usually less than a hundred dollars) and, therefore, “too easy” to get out. They have a fundamental misunderstanding of the concept.
This is a “real” business and should be approached as a “real” business, one that you had invested your life savings into. If you were a dentist had sunk $250,000 into equipment and a building to open a practice, not counting the $80,000 and all the years spent to obtain that degree, you would KEEP working at your practice until you MADE it work because you had too darn much money invested in it to give up! Well, guess what? That's what it takes in network marketing, too - dedication to keep working until you make it work.
Because of the extremely low dollar commitment to establish a network marketing business, most people treat their business as a hobby. They are unable to see the “big picture”. People are sometimes “blind sided” by accepting as truth deflating comments or ridicule from failure-prone friends. Most people who get into network marketing give it a half-hearted week's try and give up when they realize effort is involved - when they have to put down the remote and turn off the tv, give up a bowling or card evening, or, heaven forbid, talk to someone. People who have the vision, drive, and determination to put in the effort, and actually DO what it takes to succeed, will succeed. Don't blame failure on the network marketing concept. Blame success or failure on the person involved.
Is this business is for the desperate, down-and-out, or those who cannot do anything else?
Whoa, hold on for just a minute. People from all walks of life are actively engaged in Network Marketing - from corporate executives, physicians, and lawyers, to college students, housewives, and retirees. It does not take rocket scientist to realize that everyone must take care of themselves. No one is going to take care of you. Those who have substantial incomes do it by working smart. Doctors need the security of a secondary income should they become incapacitated. If a surgeon injures this hands, what does he do? Everyone should have a backup income in case the worse happens. Do you drive a car without a spare tire? Do you own a home without homeowners' insurance? I do not think so.
A physician can charge just so much. He can see a limited number of people. Therefore, Network Marketing, because it allows one to leverage time, is the ideal financial vehicle. You do that with money, why not with your time? Did you pay cash for your home or did you make a down payment and borrow the rest? College students. Housewives. Company presidents. Factory workers. Doctors. Lawyers. Retirees. The list is endless.
Sure, there are those who scoff at the concept and spread the word that it doesn't work. Network Marketing does not work. I repeat - Network Marketing does not work. Does your job work if your are not there? You work Network Marketing. Perhaps they were involved in this industry years ago under the with the idea that overnight success and wealth was theirs. Something went wrong when they realized, like with any endeavor of merit, effort was involved. It could also be a carry over of an old tale. Like the woman who cut part of a turkey off when the entire bird fit on the large plate. Perplexed, her daughter asked why she did that. Her mother replied “I don't know. Why don't you ask your grandmother.” So, she did. Her grandmother said it was because her mother did it since they only had small plates a hundred years ago.
It is not for you to determine whether Network Marketing works. That has been well proven by millions for over 60 years. Your sole task is to determine whether you can see the long-term vision of network marketing being a part of your current lifestyle, and reap tremendous financial rewards in the future.