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Network Marketing

Network Marketing

Startup Costs: Under $2,000
Home Based: Can be operated from home.
Part Time: Can be operated part-time.
Franchises Available? No
Online Operation? Yes

Network marketing is one of the hottest retail industries out there. It functions on the idea that you sell products to people who in turn sell to other people who sell to other people . . . and so on. Network marketing programs feature a minimal upfront investment–usually a few hundred dollars or less for the purchase of a product sample kit–which gives you the opportunity to sell the product line directly to family, friends and other contacts. Most network programs also ask that you recruit other sales reps–those same family members, friends and acquaintances. These sales rep recruits constitute your ‘downline,’ and their sales generate income for you. Then whoever they recruit becomes part of their downline as well as yours, generating income for them as well as for you. So the more people you bring on board, the better your income potential. If you’re a sales-savvy type who can convince others of the beauty of this plan and keep them selling sales memberships (as well as products), you can earn a substantial amount of money. And you’ve got lots of network marketing plans to choose from. The most popular sell health supplements and beauty aids, but you can go with everything from long-distance phone services to fine art prints. The advantages to this business are that start-up costs are minimal, hours are flexible, you can start part-time, and you can work from home. About the only thing you need in this business is a sense of salesmanship. If you’ve got a background in sales, you’re ahead of the game, but if not, you can still succeed. Just make sure you believe in the products and the company you’re working with. Honest enthusiasm goes a long way toward convincing others to buy.

The Market

Your customers will be anybody and everybody you know or meet. Most network marketers start off soliciting friends and family. If there are others working for the same company in your area, they may have organized weekly meetings at which salespeople and prospects gather to cheer each other on and sign up new members. If so, make it a point to attend with your own prospects. It’s harder for people to decline your invitation to join in a room full of other enthusiastic newbies. In this business, it’s important to keep your distributors selling. Don’t sell them a membership and ignore them, or they’re liable to drop down their link in the chain. Talk to them often about how they’re doing. Go with them on sales calls to offer moral support and enthusiasm and help sign up prospects. Many network marketers sell via the party plan. It’s easy and it’s fun. Have a host or hostess invite friends to sample your products. You sell products, sign people up, and the party-giver gets a free gift or a discount on her purchases.

Needed Equipment

You don’t need any special tools or equipment, except for a phone to keep in touch with your distributors, parent company and prospects, and a car to go out and sign people up and attend the weekly pep-talk meetings that are a feature of this business.

Network Marketing

Network Marketing

How Network Marketing Works

Network marketing is known by a variety of names, including multilevel marketing, cellular marketing, affiliate marketing, consumer-direct marketing, referral marketing, or home-based business franchising.

The Advantages and Disadvantages of Network Marketing

There is some stigma attached to the networking marketing business, especially those with multiple tiers, which can be characterized as pyramid schemes—that is, the salespeople in the top tier can make impressive amounts of money on commissions from the tiers below them. The people on the lower tiers will earn much less. The company makes money by selling expensive starter kits to new recruits.

The appeal of network marketing is that an individual with a lot of energy and good sales skills can create a profitable business with a modest investment.

Some reputable examples of single-tier network marketing operations include Avon Products, Mary Kay, and Excel Communications.

Special Considerations

Anyone considering joining a network marketing operation should do their research before making a decision. Consider these questions:

  • Was it pitched as a chance to make money by selling products or by recruiting others?
  • What is the track record of the company’s founders?
  • Are you personally enthusiastic about the products?
  • Are people you know enthusiastic about the products?
  • Is the product being promoted effectively?
  • Do you foresee a relatively fast pathway to profits or a long time treading water?

 

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