What is Network Marketing?

So you're wondering "What really is network marketing?"

Network marketing is about (or should legally be about) selling a product and building a network of customers and distributors in order to leverage the efforts of others.

Even now, many people unfairly judge network marketing to be a "pyramid scheme"...funny this is the same sort of judgment the "franchise" business model dealt with years ago.

First I would like to address the "pyramid" part of the judgment. Most traditional businesses today are shaped like a pyramid, actually most organizations are shaped this way. If you look at the hierarchy of any medium to large company, anyone can see that the shape is a pyramid shape. The CEO is usually one guy (or gal) at the top and has people directly below him. And below those people are more people. In the Catholic church, the pope is the head of that organization and it's shape also resembles a pyramid scheme.

Now for the "scheme" part of the judgment. The definition of capitalism according to Wikipedia is:

Capitalism typically refers to an economic and social system in which trade, industry and the means of production (also known as capital) are privately controlled and operated for a profit.

Most businesses, traditional and non-traditional - network marketing included, work within the definition of capitalism. Some business don't and that is why we have laws, to protect the consumer. Businesses sell products and services with the intent of making a profit.

Now some people say they've been ripped off by network marketing companies. I believe this is probably true. Some network marketing companies may not have the best customer service and so therefore someone may think they've been ripped off. BUT...I know many people who feel they've been ripped of by "traditional" businesses as well. If you search the internet for scams or ripoffs or product reviews, you're bound to find thousands of unsatisfied customers who feel they've been "ripped off".

So what is network marketing? And how does it differ from direct sales?

Short term consumption is a key element of a network marketing company. These companies offer products or services which are used up by people in a relatively short time frame, such as communication services, nutritional products, electrical or power services, weight loss or water filter systems. This might not bring in commission money as quickly as direct sales methods, but what it does allow is someone to build long term residual income over a period of time by building an organization.

There are hundreds of network marketing companies out there today. A few of the common characteristics include:

It's usually fairly inexpensive to join, anywhere from free to a few hundred dollars. You usually need to be on some sort of auto ship where you become a regular user of the product.
It enables people to become directly involved.
It enables people to build long term residual income.
Allow someone to leverage their time with the efforts of others.

When it comes down to it, what network marketing is, is about sales and distribution. You do need to be able to sell. It will work best for someone who is not a pushy sales person, but a concerned caring person who only wants the best for their customers.

In Comparison To Direct Sales Companies

Direct selling companies are more based on the immediate sale. They usually sell products such as make-up or jewelry. The prices are usually higher and so are the commissions, but they rarely have any substantial residual income component to them.

This means if you stop working, you stop making money AND you need to sell a lot to make a lot. Also the type of person who will do well in this business is someone who is very comfortable with a short/harder sell.

Additional Benefits of Network Marketing

Running your own business is not as easy or as glamorous as it might seem. Believe me I know. I've been a business owner for more than 10 years. One thing you need to do is put in the time to learn how to do a lot of different things. And in network marketing, the biggest skill you will need is marketing. If your marketing activities can sell for you, then you won't need to be a great sales person, because your marketing pieces will do it for you.

What you do need to be as well, is a "people person". You need to be comfortable helping & talking with people over the phone. If this is something you aren't comfortable with, you'll probably not do very well in network marketing.

Network marketing people usually go through tremendous change. Personal development is a key element. You must be willing to push yourself out side your comfort zone.

A key element to becoming successful in network marketing is to have a mentor or coach. Someone who has paved the way, seen some success and can help you to get there on a smoother road. Look for someone who is willing to invest his or her time with you.

Any network marketing company you choose will probably not be very good at marketing, especially online. You really need to become the expert and put together some of your own marketing pieces. I say this to protect you. If your company were to every go belly up, or close it's doors, what are you left with? Nothing, nada, nilch! So it's extremely important that you build a network marketing company around you and your skill set.

There are a ton of resources out there to help someone with their network marketing career, but unfortunately some of the more successful people are unreachable. You can reach me. You can work with me. The fact that you're reading this right now proves that I know how to use the power of the internet to build my network marketing business.

Join a team which trains and supports it's people and become a true network marketing professional.

Tracy Matthewman
		About the author:
		Tracy Matthewman is the publisher and editor of Women Can Do Anything, an online community and business resouce for business women and female entrepreneurs. She is also a graphic designer, website programmer and Internet marketer.