How You Can Launch a Profitable Network Marketing Business

Network marketing is a sixty-year old industry with a colorful history. It began in the 1940's when a California vitamin company decided to sell their product through independent representatives who introduced the product and company to their friends and family. Those who enjoyed the product became representatives and also told their friends and family, resulting in huge savings due to eliminated advertising costs. Instead, they paid the representatives a small override on personal sales and those of representatives they introduced to the company. This was the humble beginning of an industry which now has over 3,000 companies, 50 million representatives, and sales in excess of $100 billion worldwide, plus 91% growth in the last ten years. Although the network marketing industry is growing rapidly today, it hasn't always been that way. Many factors have hurt the reputation of network marketing and hindered its growth. Here are a few of those areas:

It's a Pyramid Scheme!

People will ask "isn't this a pyramid scheme?" The answer is "no." An illegal pyramid scheme does not have a legitimate product or service that people would buy if they weren't in the business. Also, a pyramid will pay people to recruit others into the deal. In a true network marketing company, people are paid strictly based on the sale of products/services.

Earn Millions Overnight and Never Do Anything

Many have been duped by the massive income hype and outright lies about the business potential. Network marketing is a business and it takes time to build. However, through the years, people have portrayed network marketing as a get rich quick scheme, which attracts the masses, but results in unreal expectations and rapid failure. Representatives should always present their business as one that requires a regular investment of time, productive activity, and money.

Best selling business author, Robert Kiyosaki says that network marketers should have at least a five year commitment to their business. This type of business grows quicker than other forms, but it still takes time.

Deception and Failure

In the past, people have been invited to a friend's house for dinner, only to find themselves in an uncomfortable business presentation. It is unfortunate that this has been part of the network marketing industry. Those people who are truly looking for a financial solution, will be open to a direct approach about the business. Historically, a high percentage of those who join network marketing businesses have failed. This high failure rate has tarnished the industry, however investigation unveils a similar failure rate in Real Estate, Insurance, and traditional business. Failures in network marketing are generally due to lack of work. This is a highly entrepreneurial industry that tends to attract those who are not natural entrepreneurs. They don't understand what it takes to be successful (more on this later) and so they treat their business like a hobby and it pays them like a hobby. Network marketing is a real business and there are tens of thousands who have been successful.

Hype, Hype, and More Hype

Hype attracts many people into network marketing, only to have them disappointed by poor products and a difficult compensation plan. The key here is that network marketers should not hype the business or products. Most network marketing products are superior to their retail counterparts and don't require hype. Many have also encountered complex compensation plans that require a mathematical genius to understand. When people can't understand the plan, it's difficult to share and explain, which hinders growth. There are also some compensation plans that are lucrative for the big hitters, but at the expense of the average guy or gal. Look for the plan that is fair and easy to understand. Finally, many have joined a network marketing company through a friend or family member who knew nothing more about building a business than they did. Due to lack of training and on-going support, they failed. Today, more companies are taking responsibility for at least the initial training, which enables new representatives to start making money. Also, there are more responsible sponsors than ever before, so training and support are less of a hindrance than in the past.

Business is Booming

With a seemingly tarnished image and a negative stigma attached to the industry, why is the network marketing industry growing so rapidly?

First, network marketing is now a time-proven business model. It's no longer a question of whether it will work, as there are network marketing companies that are over 50 years old with sales in the multi-billions of dollars annually. No, every network marketing company will not succeed, but many more do today than ever before. The key is to select a company that has the highest odds of success (More on this later).

Second, network marketing is the perfect form of business for the current economic marketplace. Millions have been laid off from jobs, and those who kept theirs must work long, hard hours to make up for those who were released. Many are turning to a home based network marketing business as their answer.

Third, network marketing fits the internet culture. What better place to build a network marketing business, than on a worldwide network? Also, in-home buying is more popular than ever before and advertising is less effective than at any point in history. The time-proven answer? People can purchase high quality products directly from a web site, have them delivered to their door, and enjoy a solid money back guarantee. Then, if they like what they bought, they can recommend the products to friends and family and receive a commission from the company. If their friends and family would also like to refer the products, the original person receives an override on those purchases as well.

Fourth, network marketing is the only business that anyone can do. The initial and on-going investment is very low, as is the risk. No need for a college degree or special education. People age 18 and up can operate a network marketing business. Women dominate the industry and are not limited by the glass ceiling. Families can work together in a network marketing business, teaching the children about business, economics, finances, and people skills.

Fifth, most network marketing companies offer a turn-key system, similar to franchising. Representatives are authorized to use the company name, logo, trade names, web sites, forms, and anything else that is available. This usually includes excellent step-by-step training and on-going support. Franchising has been the preferred business model for the last fifty years, but most people can't afford franchises, which is one reason they are turning to network marketing, "the people's franchise".

Sixth, network marketing is more mainstream. Rich Dad, Poor Dad author, Robert Kiyosaki, refers to network marketing as "the business of the 21st century", in his book by the same title. Billionaire, Warren Buffet, calls it "the best investment I ever made," referring to the three network marketing companies he has purchased. Business management expert and author, Tom Peters, calls network marketing "the first really revolutionary shift in marketing." Even real estate tycoon, Donald Trump is involved in network marketing.

People Have Been Doing Network Marketing All Their Lives

People refer to network marketing as sales, but it isn't. Rather, it's something people have done all of their lives. Everyone has recommended a great movie or a fantastic restaurant or an enthralling book, but never got paid. In a legitimate network marketing company, they will recommend the product/service and the business to their friends and family and when they buy, the representative gets paid! Since this is something people do naturally, why aren't more people successful in network marketing? Primarily because they have trouble translating that natural tendency to refer things into an actual business. Here are a few keys to building a successful network marketing business.

Selecting the Right Company is the First Key to Success

The first key is to pick the best network marketing company; one that can be proudly represented. History proves that there are five pillars to a successful network marketing company:

1. Management - the management team must include people who have experience building large, successful traditional businesses and also successful network marketing representativeships. This is the best of both worlds - they know how to build a big business and they think like representatives. Also, look for a visionary leader heading up the company, a behind the scenes operations person, a marketing genius, and a trainer/teacher. This overall combination will produce a winner in the management pillar.

2. Product/Service - historically products out-perform services, but there are a few top network marketing companies that offer services, so don't completely discount them. The keys here are that the product or service is something people would use and become passionate about, even if they aren't involved in the business. The product or service should be such that customers and representatives need to buy it at least monthly via an automatic purchase program. The product/service should have both present and future demand and appeal to the masses (all ages, genders, ethnic groups, etc.). It's a huge plus if the product or service is unique (patented or exclusive).

3. Trends - look for powerful market trends that will drive the company through massive exponential growth and you've got a real winner. Anything the Baby Boomers (those people born between 1946 and 1964) want will be a big hit. Anything the media is talking about (that also has future demand) is probably going to be big. Look around you. Read books and articles that are talking about trends and then find a network marketing company with products/services that fit those trends. For example, a huge present and future trend is health and wellness, so those companies that are marketing health and wellness products are going to enjoy growth due to this powerful trend.

4. Compensation - every network marketing company offers a compensation plan, which is how representatives are paid. A good plan will enable the average person, who will historically only sponsor 2-4 people, to make enough money to cover their monthly product purchase within their first 90 days. The plan will also have solid middle money for those who want to replace their job income and great back end money, providing the potential for high six and seven figure incomes. The compensation plan should also be easy to understand and explain.

5. Training and Support - a primary reason people fail is that they aren't trained and supported properly. The company should provide training on the products/services, compensation plan, back office system, and business building. A legitimate company offer replicable representative web sites, weekly webinars/ teleconferences, and live meetings. A good upline team will provide deeper training and support (three-way calls, prospect meetings, conference calls). These and other helpful guidelines can be found in Daren C. Falter's book, How to Select a Network Marketing Company.

The Second Key to Success is Belief

In order to achieve long-term network marketing success, a person must believe in the network marketing industry, in the company they represent, and in themselves. This is like a three-legged stool. If one leg is short, the stool will wobble, so balance is critical. Here are some tips on how to build belief in these three areas:

1. Industry - there are many excellent books and recordings on the network marketing industry. Books: The Business of the 21st Century by Robert Kiyosaki, The Next Millionaires by Paul Zane Pilzer, and The Ideal Business by Rod Nichols. CD's: The Perfect Storm by Paul Zane Pilzer, The Perfect Business by Robert Kiyosaki, and Business is Booming (Video Plus). These books and CD's talk about why network marketing is the place to be. The key here is for each representative to achieve an unshakable belief in network marketing.

2. Company - every legitimate company offers web sites, CD's, DVD's, and printed materials that talk about the history of the company, the management team, products, compensation plan, etc. They will also offer webinars, teleconferences, and live meetings that increase belief in the company. A trip to the headquarters/manufacturing facility will also result in greater belief. Perhaps the biggest belief builder is attending a company convention. Again, the key here is to believe in the company strong enough that nothing can be said that will break that belief.

3. Self - it's one thing to believe in the industry and company, but if a person does not believe that they can succeed in network marketing, it's game over. Build belief in self through books like Think and Grow Rich by Napoleon Hill, How to Win Friends and Influence People by Dale Carnegie, The Slight Edge by Jeff Olson, and The Twelve Power Secrets for Network Marketing Success by Rod Nichols. Attend network marketing events where successful representatives are sharing their stories. Nothing builds belief like hearing from someone with a similar background who has achieved success.

The Third Key to Success is Action

Once a person has selected the right company and is on the path to unshakable belief, the next step is action. In fact, this is the biggest key to on-going success in network marketing. The best market is friends and family. Before launching into any other form of marketing, do the following:

1. Business Announcement -

send an announcement about a grand opening for your business to your friends and family. Invite them to your home or another location. Serve light snacks and beverages. Share your business through a video or power point presentation. Give an info pack to everyone. Schedule times to meet with those interested.

2. FORM Your Friends and Family -

every legitimate company teaches representatives to make their list and begin contacting them. Contrary to popular belief, this is not "old school" it's the school. Network marketing is a person to person business. Leads can be generated through the internet and through advertising, but nothing is as powerful as the person-to-person referral. Beware of the vomit approach (spewing too many facts and figures), as it turns people off. Instead, use a conversational approach - ask about their Family (spouse, kids, parents), Occupation (their job or business, spouse's job or business), Recreation (vacations, hobbies, fun activities), and Money (investments, financial security). These questions will uncover "pain areas". Now the business can be presented as a solution to their pain areas, rather than as a sales pitch.

The Fourth Key is Leadership

As a representative enrolls people into their business, the daily actions become two-fold. First, to continue attracting new people and second to lead the team. One big caution here. Don't fall into the management trap. Too many representatives start managing their handful of representatives and the business quickly fails. The job is to lead by example. Enroll new people every month. Consistently hit new company ranks. Set up and lead local meetings. Do weekly webinars or conference calls. Leaders get out front and say, "follow me". Leaders never ask their network to do anything they're not doing. Leaders show the way and are at every company event. They manage their time effectively and get maximum results. Leaders attract other leaders who have large circles of influence. Be a leader, rather than a manager and the business will grow quickly.

Network Marketing is the Wave of the Future

In today's crazy economy where people are losing their life savings in the stock market, being downsized out of their jobs, losing their homes to foreclosure, and declaring bankruptcy in record numbers, it's time to take control. A home-based network marketing business is the answer. It's time-proven as a legitimate business in which anyone can succeed with time and effort. The initial and on-going investment is low and no special education necessary. The current culture is primed for a business where people are introduced to great products and services by their trusted friends and family members, which can be ordered through the internet. They are looking for a way to be home with the kids and still earn an income. People are also looking for great tax advantages. W-2 income is the way of the past. 1099 residual income (the kind earned in network marketing) is the wave of the future. Create a successful future by selecting the right network marketing company, building belief in the industry, company, and yourself, and then launch boldly into action. Lead by example, attract leaders, and watch the business grow exponentially. The result can be total time and financial freedom and the life most people only dream about.