What Is Network Marketing?

So you’re probably thinking. “I know what Network Marketing is. That’s why I’m on this website.” So why am I dedicating a page to giving “basic” information about this topic? Because, most people (including myself) who get involved in an MLM opportunity don’t truly understand what this kind of business really is.

Still confused? Let me clarify a bit. I’ve brainstormed the five most common misconceptions about this industry. But before I take you through them. Let me first give you an idea of what I think an MLM business IS.

Network Marketing IS #1

Direct Sales with multiple levels in its compensation plan. You see in a traditional direct sales model, you would get paid a commission for each product/service you sold. This is what also happens in MLM. But, with a multi-level marketing business you also get paid a commission when one of your business partners makes a sale.

You know this right? Of course you do. But this brings me to my next point.

Network Marketing IS #2

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A way of getting paid. That’s it. An MLM is simply a model of how that company pays you based on your (and your team’s) sales efforts. It’s really no more complicated than that.

Network Marketing IS #3

A REAL BUSINESS. Many of us jump into our businesses, with high hopes of working 10 hours a week and earning $100,000 in the next 12 months. Well let’s face facts. 95% of businesses fail. Notice I said businesses, not MLM businesses. Most business start ups simply don’t make enough money and wind up closing their doors within a years time.

Multi-level marketing is no different. 97% of Networkers fail to earn a profit and most have given up on their dreams of financial freedom after 3 months. I know its scary, but it’s the truth.

So what separates those who succeed in this industry from those who don’t? The same thing that separates the Bill Gates’ of the world from the nameless business guy who can't get his business off the ground. Preparation, skill development, and dedication.

Preparation is the first step to your success so do your due diligence BEFORE you jump into an MLM company. You can get some help with starting your MLM business by taking our Free Network Marketing Start Up Course.

Network Marketing IS # 4

A legitimate way to earn an income. If you’ve been involved in MLM at all, you have probably heard some negative opinions of it. I was no different when I first got started. As a matter of fact, I once held such negative views about the industry. Now I’m not saying that ALL MLM companies are trustworthy and on the up and up. Heck, there are businesses in every industry that lie and steal from honest people.

What I AM saying is that, the network marketing business model is perfectly legal. It is our job as the smart business people that we are, to do our research and make sure we are joining an MLM opportunity that is operating ethically. That's right, we have to learn how to spot the MLM scams out there.

Network Marketing IS #5

Sales. I know. You may not want to hear/read this. But MLM is SALES. Most of us, (including me) were told that this is all about “sharing” wonderful products and an excellent business opportunity.

Let’s all be honest with ourselves. As much as I would like to believe that I can “share” my way to a six figure income, it just doesn’t make good business sense. Think about it this way. No business, network marketing or otherwise, would exist if nothing were being sold. Pepsi sells its colas. Sara Lee sells its cakes. And we as Networkers sell our product/service and business opportunity.

This is not to say that you should be a “stereotypical” sales person. Let me put that another way. Successful sales people DO NOT push their product onto people who couldn’t care less about what they are offering. Successful sales people use what is called the consultative approach to sales.

Take this concept to heart and you will be much more successful than the average business builder. Sales people SELL. Consultants ADVISE. And people love to buy things from Consultants who give good advice!

So What Are Those MLM Misconceptions?

Okay, so now that we’ve talked a little bit about what MLM IS. Lets move on to talk about what it IS NOT.

Part of the huge misconceptions about this business model come from many of the marketing strategies that new marketers are encourage to use. Things like, recruiting friends and family and chatting up strangers in the mall about your business.

These are NOT methods that I have found to be effective. I won't call them completely ineffective, but many of them are outdated.

Ann Sieg is a Networker who has struggled in the past, but has successfully built several MLM organizations. She outlines what she calls "the LIES" of the industry in her e-book The 7 Great Lies of Network Marketing. This free e-book was an eye opening experience for me. It immediately struck a cord with me, as I had been told many of the things she talks about in her book.

I won't go as far to say that they are "LIES" But I will say that these statements are commonly made in this industry. AND lead many newbies down a road of frustration and failure.

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