How to Lose Friends and Alienate People

Have you ever been disappointed that an old friend rang you up out of the blue? Have you ever tried to avoid friends and family by hiding in doorways?

Is that the real power of ‘network marketing’ or ‘pyramid sales’? We dread yet another one of our friends in the ‘clutches’ of ‘those companies’, lost to the dark side, spoiling every social get-together by pushing their products.

It doesn’t have to be like that, you know. Try this perspective for a minute: thank goodness I get to spend my money with somebody I care about and want to see do well. I know I can trust him/ her, so if they say this product is good, then I bet it really is that good. And it’s another way of keeping some of our money local and amongst ourselves.

Network marketing or MLM – multi-level marketing companies offer us this option. Products are sold directly to the end-user via local distributors. Overheads are reduced by cutting out the various middlemen of wholesalers, distributors and retailers, who all take a substantial amount of the profits. So, products shipped to several local distributors and sold directly meant increasing profit margins for everyone involved. Amway, Avon, Tupperware, etc. are all reputable companies who have been using that method for many decades.

The other aspect is that those local distributors grow the business themselves by finding more distributors and that way, they earn commission recommending products and a business they feel passionate about.

If it works, you have a far more motivated and skilled workforce than any shop assistant in a retail environment who have to sell numerous, competitive products and who rarely have an incentive to sell them and if they do, it is small and certainly not for one particular brand.

The PioneersThere is no mystery to network marketing. It's just another form of sales and distribution and close to 60 million people are involved in this industry. It has surpassed £50 billion in retail revenue with the UK accounting for £2 billion.

In the early 1940's, a company by the name of California Vitamins recognized that all their new sales representatives coming aboard were friends and family of their existing sales force, primarily because they wanted the product at wholesale cost. They also discovered that it was easier to create a sales force of a lot of people who each sold a small amount of product than it was to find a few superstars who could sell a lot of products.

So they combined those two ideas and designed a sales compensation structure that encouraged their salespeople to invite new representatives from satisfied customers, who each had the same right to offer the product and representative status to others, which allowed the sales force to grow exponentially. The company rewarded them for the sales produced by their entire group or network of sales representatives. Network Marketing was born!

How to make big money:

The way to make big money is through residual or passive income. Residual income simply means that as you grow your business, you will be increasing your commission through the effort of others as well as your own, so while you have to work hard initially, eventually you can retire on a continuing, sizeable income. The standard saying is ‘work harder than you have ever worked for 4 years, retire for the rest of your life’.

Separating the good from the bad:

The answer lies in three elements: finance, trends and training.Commission structures vary a lot and affect how you create that residual income. There are various models and methods and it requires some careful trawling-through to find out what works best for you.

Harvard Business School identified that on average, most people only ever introduce 2 people to the business, so they suggest that the key is in putting a model together that focuses on that – inviting 2 people into the business and converting that into a duplicatable system. And secondly, ensure that the company you look at has a fair structure, so that money can be made whenever you join the business and that it isn’t atop-heavy.Trends are also changing at the moment. The property sector, for so long considered to be the safest investment area alongside stocks and shares are both predicted to be on their way out – and the reason? The baby boomers that have created every single trend over the last 60 years are beginning to withdraw their money from those areas and spending it on their health and their leisure. These industries are on the increase – and interestingly, many of those companies have been continuing to grow right through this last year irrespective of the current financial climate.

Success is determined by the quality of the training provided. A good company will have extensive training materials and many training sessions that are available to all. They will continue to support and inspire their distributors.

Open minds, open ears:The one thing I have learnt is that it never hurts to listen. There are opportunities available to us through routes we have not yet considered – and unless I listen with an open mind, I’ll never know.

The reason I learnt to have an open mind is that the endorsement for network marketing is coming from areas that I respect: Harvard Business School is teaching network marketing as one of the existing business models and has analysed different companies and what works and what doesn’t. Donald Trump and Richard Branson are great advocates of the system and argue that it is the 21st century way to create an independent income that continues to come in regardless of you working or not – Virgin Vie in fact use the model to sell their cosmetics. And Robert Kiyosaki, who wrote ‘Rich Dad/ Poor Dad’ amongst many others, has also explained that he considers network marketing to be the business model of today.

So, no thanks, I have decided I don’t need a recession this year; I’m doing it the network marketing way.