Network Marketing The Business Model

Network Marketing,​ the​ Business Model
Network marketing is​ a​ multi-billion dollar business .​
As a​ business model,​ it​ is​ taught in​ major universities around the​ world .​
The Wall Street Journal stated,​ …between 50% and 65% of​ all goods and services sold in​ this millennium will be through network marketing .​
It is​ a​ business model that is​ perfectly suited to​ the​ information age.
What is​ this Business Model?
Network marketing is​ a​ way of​ doing business that is​ different from the​ traditional model used by most consumer packaged goods,​ food and drug companies .​
It is​ one of​ the​ most promising income opportunities in​ American today .​
It is​ the​ idea of​ many people each doing a​ little work,​ as​ opposed to​ a​ few people doing a​ lot of​ work .​
To quote J .​
Paul Getty,​ the​ world’s first billionaire,​ I’d rather have 1% of​ the​ efforts of​ 100 people than 100% of​ my own.
Rather than using the​ customary distribution process of​ moving products from manufacturer to​ wholesaler to​ retailer to​ consumer,​ network marketing companies use a​ network of​ independent marketers to​ move products directly from the​ manufacturer to​ the​ consumer .​
Further,​ the​ cost structure of​ a​ network marketing organization is​ different than a​ traditional packaged goods marketer.
With a​ traditional company,​ millions of​ dollars are spent on​ advertising to​ entice consumers to​ buy that company’s products instead of​ the​ virtually identical product from another company .​
With a​ network company,​ the​ advertising expense is​ channeled into sales commissions for distributors who promote the​ product through word-of-mouth advertising,​ i.e .​
by telling other people about the​ product .​
In the​ traditional business model,​ money is​ spent BEFORE the​ sale in​ the​ form of​ advertising; in​ the​ network marketing model,​ the​ money is​ paid AFTER the​ sale in​ the​ form of​ commissions .​
Which model seems to​ make the​ most sense from a​ business standpoint?
With network marketing,​ you​ have two sources of​ income: (1) direct commissions from sales you​ make yourself,​ and (2) commissions from sales made by people you​ introduce to​ the​ business,​ called residual income .​
You can invest your time and money once and get paid multiple times for the​ effort .​
It means getting paid for the​ work of​ others .​
In traditional sales,​ you​ may be a​ great salesperson and have a​ few dozen good customers and earn your income from all their purchases .​
However,​ you​ probably have to​ nurture these customers and spend most of​ your working time making sure they are buying from you​ and not someone else.
In network marketing,​ you​ can build a​ downline of​ 100,​ 1,​000,​ or​ even 10,​000 people,​ most of​ whom you​ will not know nor ever have contact with .​
This is​ because the​ majority of​ the​ people in​ your downline will be people who know somebody,​ who know somebody,​ who know somebody,​ who know you​ .​
By having a​ downline that is​ working with you,​ and for you,​ you​ can multiply your efforts many times .​
The earning potential of​ a​ downline of​ 1,​000 people,​ each putting in​ only one hour a​ day five days a​ week,​ represents 20,​000 hours of​ work in​ a​ month .​
It would take one person 10 years to​ produce the​ same amount of​ work .​
That’s the​ power of​ a​ network.
Perhaps Robert T .​
Kiyosaki,​ author of​ the​ Rich Dad,​ Poor Dad series,​ said it​ best .​
The richest people in​ the​ world look for networks .​
Everyone else looks for work.
It is​ estimated that more than 50,​000 people start a​ home-based business every week in​ the​ United States .​
The average person owning a​ home-based business earns more than $50,​000 a​ year (often working part-time),​ while the​ national average annual household income is​ less than $45,​000 (and most of​ those people are working at​ least 40 hours per week) .​
Additionally,​ a​ home-based business owner can qualify for many legitimate tax breaks,​ and tax experts suggest that the​ average person can save between $2,​000 and $10,​000 on​ taxes every year just by starting a​ home-based business .​
How is​ this possible? Well,​ consider these two tax structures: a​ wage earner first earns income,​ then pays tax on​ that income,​ and then pays for expenses with after-tax income .​
a​ business owner first earns income,​ then pays for expenses,​ and then pays tax on​ net income after expenses .​
In other words,​ a​ business owner can legitimately reduce the​ amount of​ tax he or​ she has to​ pay because business expenses are paid with pre-tax income,​ not after-tax,​ income.
Network marketing is​ a​ $36 Billion industry in​ the​ United States .​
More than 20 per cent of​ the​ estimated one million millionaires in​ America today have earned their fortunes over the​ previous six years through network marketing .​
Worldwide,​ there are over 3.5 million millionaires,​ and more than 700,​000 have made their millions via network marketing .​
Conservative estimates are that network marketing in​ America is​ creating 40 new millionaires every month from average people .​
This means that a​ person’s greatest chance of​ financial success is​ through networking .​
Again,​ Robert Kiyosaki observed,​ If I​ had it​ to​ do all over again,​ I​ would choose network marketing.
For people who are interested in​ starting a​ home-based business,​ supplementing their income,​ and providing greater security for retirement and for their children and grandchildren,​ network marketing is​ an​ obvious choice.
Bruce Bailey,​ Ph.D.
Network Marketing The Business Model Network Marketing The Business Model Reviewed by Henda Yesti on July 07, 2018 Rating: 5

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