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Business opportunity Articles Charles Crisp Associates and Team Newsletter

Network Marketing

Network Marketing: what it is and what it is not.

Network Marketing is a method of distribution. It is used by ethical and genuine businesses
as a legitimate business model. It is not a pyramid scheme which is illegal in many countries.

Distribution Model: In a network marketing business the company distributes it's products
or services through a network of Independent Distributors. This avoids the mark up made
at each stage of the supply chain in a standard business model and eliminates the need
for fixed costs such as retail premises and the related costs, including employee costs.
The sales and advertising is undertaken by the Independent Distributors with the company
providing support in terms of the sales support material and marketing tools. The company,
therefore, is very lean and has a low cost base.
Independent Distributor Income model: In exchange for undertaking the sales and marketing
role for the company the Independent distributors receive an income based on the sales made
by themselves and their network. This provides the opportunity for entrepreneurial people to
build big networks which they train and so enhance sales of the network. This ability to build
networks of virtually unlimited size (the downline) creates the situation where the successful
networker can achieve high incomes based on the sales results of their network. Therefore,
the bigger you build the network the more money you make. This is called leverage.
Leverage: The priciple of "give me a lever big enough and I will move the world" is in play here.
The bigger the network grows the bigger the income potential. To put it another way, the
more you put in the more you can get out. Building networks takes time and effort. Members
of two similar sized networks may have vastly different results because of the superior
training skills and systems in the more successful network. But all this takes time.
Network marketing is not a get rich scheme but requires a persistent and sustained effort to
develop and support the opportunity. The key thing to look for is whether the system
employed is easy for members of the network to duplicate.
Duplication: This is the key to riches! However good your idea maybe it will be enhanced
massively if the members of the network can duplicate the system. If you have a great idea
that can be copied and implemented by the rest of the network the impact of the idea is
mutiplied by the size of that network.

How does Networking work?

.The principle is like an organisation chart in a business. You are the head of your organisation
and if you recruit 3 people into your downline (ist level) who in turn recruit 3 people each
(your second level) you would have a down line of 3 + 9 =12

If the 3 on your second level each recruit 3 then you would have 27 people on your 3rd level or
39 people in total. This all takes time but you can see that if you bring in 5 people who each bring
in 5 who each bring in 5 you would have 25 on your second level and 125 on your third level.

This ability to leverage is very powerful but it takes time to put in place. In Pyramid schemes
all people try to do is bring people in and receive an income from that but without selling any
product or service. This will always end up collapsing; just the law of mathematics.
Legitimate network marketing businesses give little if any reward for intoducing a new person
but you do receive a commission based on their sales. In other words Network Marketing is about
establishing a distribution network to sell the products into the market place.

The Importance of the Products or Service being offered

From the above explanation it is clear that it is the sale of the products that sustains the business
just like any other business. With this in mind it is essential the the product offering will have a
fundamental impact on the sustainability of the network. It is no surprise that about 75% of all
Network Marketing businesses are selling consumable products for home and personal care use
as well as the fast growing wellness sector. A network based on technology is more vulnerable
due to the rate of change of the technology itself. You only have to go back a few years to find
faxes everywhere and now they have been largely rplaced by email.

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