If you are thinking about starting a side business, you’ve probably considered Network Marketing. (If you haven’t, I’d suggest you at least take a look.) There is a lot of confusion, mis-information and hype about Network Marketing. Because of this, I’d like to answer the basic question, “How does Network Marketing work?”
Network Marketing begins with the products. Without market-viable products, you don’t have a Network Marketing opportunity, you have a Pyramid Scheme. Market-viable means that people buy and continue to buy the product(s) without participating in the business opportunity. They are customers. Therefore, if your company isn’t making a significant percentage of sales to real, honest-to-goodness customers, you should steer clear.
What makes Network Marketing different?
Let’s say you opened a business selling widgets and you wanted to achieve $1,000,000 per month in sales. To reach this goal you could hire 100 salespeople and give them a quota of $10,000 per month each. In that case, you’d train or replace under-performers until you had a team that was consistently hitting quota. As a result you would reach your $1,000,000 goal.
On the other hand, you could use a Network Marketing model to achieve your goal.
In Network Marketing, rather than using full-time sales pros, we utilize our best customers to spread the word for us. Most of these people don’t really like to sell, but they will tell people about a product they like and use themselves.
These people are neither full-time nor part-time employees. They are some-time associates who “work” when they feel like it. Not only do these advocates not have quotas, they don’t have any obligation to do anything, if they choose not to. This is a totally volunteer army.
To stay with our example, let’s say you put together a team of 10,000 of them. All they would have to sell per month, on avearge, is $100 each for you to reach your $1,000,000 goal.
Network Marketing isn’t about a few highly skilled salespeople each producing massive volume. Rather it is about a large number of people using and recommending a product they believe in. It’s about a lot of people each selling just a little bit. And if those people see and believe in the wealth-creating possibilites of geometric growth, they find other people to do the same thing.
Same outcome, different path.
So how does Network Marketing work? Network Marketing uses a different paradigm to achieve high sales volume. It uses a team of product advocates who use and recommend the product. These folks also invite other people to do the same. Over time, each person has the potential, but not the obligation, to put together their own large team of volunteers.
A large group of enthusiastic product advocates cheerfully recommending something they use and love. That’s how Network Marketing works.
How do you develop a large Network Marketing team?
Once you understand how Network Marketing works, the next question becomes, how do you get all those people? Who could possibly find that many people?
I touch on that here. But we’ll talk more about it in a future article.