In simple terms, MLM or network marketing is a network of people who have access to a range of products and services that are distributed through that network.
Rather than operating via a shopfront, people can buy these products and services for personal use or to sell to others. Further to this, people can assist in expanding the network by inviting others to join the network, thus extending the concept to their sphere. Over time, and with more people introduced, the volume of products and services being dis- tributed increases. Along the way, a portion of the profits on those products and services are paid to you and people in your
‘down-line’ (we’ll explain some of this terminology later). In time, the opportunity to create a regular income from a team of people using and selling products becomes a reality.
Over the years, network marketing has attracted some less than favourable perceptions. The industry’s image was tarnished in its early days of development, when there were no systems in place to educate those involved to go about their business in an ethical and professional manner. Additionally, there were many disreputable companies around who took the attitude of selling products at any cost, to anyone, with no long-term strategy; there were also some illegal pyramid schemes that entered the market disguised as network marketing companies.
Today there are well over 20 million people around the globe involved in network marketing, also known as multi-level marketing (MLM) or direct selling, and this figure is growing. Manufacturers, many of them Fortune 500 companies, now see it as a viable and credible alternative for distributing their products and services. Reaching consumers directly through traditional retailing methods and/or outlets is not only diffi- cult, it is extremely costly. Today, almost everything— including health supplements, cosmetics, cleaning products, training materials, clothes, cars and travel—can be and is being sold through network marketing. Some of the most famous names in the network marketing industry include Avon, Usana, Melaleuca, Mary Kay, Quixtar, Herbalife, Amway, Tupperware, Juice Plus, Nu Skin and AIM.
Technology, especially the Internet, has had a dramatic impact on the industry, and more and more it is seen to be moving into the marketing mainstream. The industry is rapidly maturing and those becoming involved in network marketing are now more often than not coming from pro- fessional backgrounds.
Network marketing has certainly come of age. It is an excellent way to get into business, it has a lot of appealing aspects that cannot be found in mainstream businesses (we discuss this throughout the book), and many of the 20 million people involved are making a lot of money, for not a lot of work. They did the hard yards when they started but now they enjoy the fruits of their labour with a solid passive income stream and residual income.
Previously, many people saw network marketing as some- thing you did on the side to make a little extra cash. This option is still available today, but for most people now involved in it, network marketing is an opportunity to establish a business that is, and will continue to be, their main source of income.
One of the biggest mistakes made by people becoming involved with network marketing is failing to treat it as a real business right from the start. Because there is normally a relatively low start-up cost, and a high degree of flexibility, some people treat it more as a hobby. That said, this concept does work for some people. They manage to set up a great little business which supplements their income and helps them to acquire the things they want out of life. But for many others, their lack of conviction ultimately results in the business slowly fading into the background—materials, books and products are left to gather dust on a shelf and the words ‘network marketing simply isn’t for me’ are uttered whenever the concept is raised.
The main purpose of this book is to make you, the reader, aware of the similarities between building a network marketing business and building a traditional business. Even though the way each one works, and the end results, are different, many of the principles, fundamentals and attitudes behind making each business a success remain the same. If you can see your network marketing business as just that, a business, right from the start and give it the respect and focus required, and at the same time recognise that many of the principles and challenges are no different to starting up a pet shop, for example, then you are a long way towards achieving success.
Numerous network marketing companies are now estab- lished around the world. The way they do business, their structure and the terminology used varies from company to company. While our discussion has been kept as generic as possible, to encompass the industry overall, most observations are based on experiences with a particular network marketing company. If the references and examples we use don’t always seem relevant to the particular network marketing company you are involved in, you can bet that the principle of treating it like a real business still applies.
