What is Network Marketing?

So you’ve joined Network Marketing….

You’re full of hope and excitement, balanced with a dose of fear and uncertainty.

And sure enough – the first person you speak to tells you it’s just a pyramid scheme, it’s a scam – ‘I can get that same stuff on the shelf at the shops for cheaper…’

Sound familiar?

 

Well if that’s you, I want to spend some time today really just looking at Network Marketing in a black and white, apples to apples way. I want to give you the information, so you can arm yourself with knowledge and build your belief.

Whether you’re getting started but don’t quite know how to explain things well enough yet, or you don’t know how to answer people when they have questions or objections – or maybe you’re all good with your belief and confidence and you just love to learn – with the right knowledge you can truly decide whether this is or isn’t for you.

Because it’s not for everyone. It’s not perfect – nothing is (except my wife of course). There are challenges to building a Network Marketing business. And entrepreneurship in general isn’t for everyone. But when we compare it against everything else – nothing else can come close to matching what we have.

So let’s get our facts together first – then you can decide where to go.

 

What actually is Network Marketing and why do companies and businesses choose to distribute their products through Network Marketing?

 

Well let’s look at a traditional company first. Let’s say they sell protein powder.

Firstly they’ll create the protein powder – source ingredients and package it together.

Then they’ll bring in a marketing team. The marketing team work on the label design so it stands out on the supermarket shelf, a catchy name and logo with an enticing byline under the product name.

Then the advertising team will take the package, have a sports star or a celebrity hold it and say they use it. They’ll create ads, commercials, banners, billboards and media releases about it all.

Then a wholesaler will buy pallets full of the powder to distribute to the retail stores. Now that wholesaler has rent, staff and bills to pay – so they will have to bump up the price a bit as they send it off to the retailer.

And then the retailer puts it on their shelf – but they also have rent, staff and bills to pay, so they’ll add some extras in to cover their costs.

And eventually you buy the protein powder.

Now if it cost you $50 to buy, chances are there’s about $5 worth of ingredients in there. But every step along the path above caused extra money to be added into the final price tag. The money they paid the marketing team, the celebrity, the TV station – all of that is added into your final costs. The wholesaler and retailer adding their 30% mark up each – you’re paying that along the way.

 

Now compare that to a Network Marketing company.

The company also produces a protein powder – they source ingredients and put it into a package.

Now it’s not as flash as other packages, but they’re not spending their money there.

And there’s no TV ad or Celebrity talking about how good it is – because they’re not spending money there.

And there’s no wholesaler or retailer taking their cuts – because they’re not spending money there.

Instead, all of those budgets are being bundled into the budget for their distributors. They’re deciding to spend their money rewarding the people who are advertising their products for them, and cutting a lot of middlemen along the way.

So overall, they can produce a similar product and actually get it to you cheaper. Or they can produce a better product and get it to you for a similar price to what you’d pay.

A corollary to this as well – Company A has to constantly compete against other companies for shelf space and market share. And they generally do that by increasing their marketing budget (by eating away at their ingredient budget) or by reducing their price point (by reducing the quality of their ingredients). Either way – you’re constantly losing.

 

And that leads us to one of the biggest myths and misconceptions – where people say they don’t want to buy anything from a Network Marketing company because they ‘don’t want all these people making money along the way’ – completely ignoring the fact that every single thing they’ve ever bought from a shop would have had at least half a dozen companies and countless people making money off their purchase along the supply chain. They never seem to question the staff member working at the retail shop how much they’re making off each purchase, or the Managers, CEOs and share-holders of the retail chain, or the Marketing Agency’s team etc. – but they’re all getting paid thanks to the products that are being bought.

And while it’s nice to say that you use the same protein powder as Celebrity XYZ – you’re the one helping to fund their lifestyle each time you purchase a new canister. And chances are pretty slim they actually use the product they’re holding in the TV ad.

Now yes – buying from a Network Marketing distributor means they, and a handful of others will benefit. Generally 3-4 people will get paid along the way. And yes, one of those 3-4 maybe the proverbial lucky person who got in early. But chances are very high that the people getting a cut are doing this to have some extra money each week to pay for their kids dance lessons or to have a nicer holiday here and there. I’d rather a struggling Mum makes some extra cash along the way, than a marketing company CEO and a nameless celebrity. But maybe that’s just me…

 

But that brings us to our second question; Should you join Network Marketing?

Well let’s look at it against other options out there. Like a job.

Jobs have one great benefit – you get paid pretty much straight away. You show up, do what you’re told and then get paid at the end of each week or month. The flip side – once you stop, so does the money. In Network Marketing, our pay is often delayed. There are some bonuses at the start to help you get going, but the true financial reward might take months, or even years, to truly see. There’s a huge delay to the reward and gratification. The flip side – once you build this, and build it properly, then you continue to get paid – for months and years after you stop. If you build it really well, your children will get paid, long after you’ve left the earth.

Another option is to go to College or University. You come out at the end being able to command a higher wage and potentially a better job. Now that’s great – but it costs a lot of money to go to University and you have to go for years. You have to make the sacrifices up front, for a better job later – but it still has all the same limitations as before. In Network Marketing, 99% of your training and education is available either free or close enough. Compared to a University degree – pennies on the dollar. The problem is – because it’s often free, people don’t value it. People won’t read the books, listen to the podcasts, attend the events – they won’t dedicate time to learning the skills. Every job, every profession requires skills to be learned and mastered. But imagine if you spent 4 years studying and training to be a Network Marketer, in the same way people spend 4 years studying to complete a degree. Do you think you’d come out pretty well skilled, with an educational debt about 1% of what people are leaving College with these days.

Now you could start a business. In the modern world, there’s a lot of online options – like Network Marketing – but let’s just focus on the traditional business setup for this point. It costs, on average, around $50,000 to START a business. Let alone RUN a business. It cost me $25 to start my Network Marketing business. I could literally try 2,000 different Network Marketing businesses for the cost of STARTING one traditional business. I reckon I’d hit a home run in one of those 2,000 companies….

The final thing people try is investing. Now I am a big advocate for investing for long-term wealth and leaving a legacy behind – but the simple truth is that it takes a lot of money to invest. Invest safely for sure. You can invest with small amounts and take huge risks – but that’s a great way to lose everything and more. I DEFINITELY DO NOT recommend that. But let’s say you started a Network Marketing company for a small amount of money, then used that extra income to start some safe investing – imagine where you’d be in 10 years time….

 

So Network Marketing – is it perfect? No. Outside of my wife and our kids, nothing is. But compare it to what else is out there and you can’t beat it. You can start with a small investment, hustle hard alongside free education, eventually building an asset that will pay you and your family forever…. Hard to beat.

 

 

So that brings us to the final question; Is Network Marketing for you?

Well there’s only one way to find out. And that’s by giving it a go. Work on these 3 things – and I’m sure you will have success.

1. The Right Vehicle. Make sure you align with a company that has products or services that you love. Make sure you’re standing alongside a company that excites you each day. Most companies have (very generous) 30 day money back guarantees on their products or service, so you can try them first and see if they’re the right fit for you. Just don’t expect to be financially free in 30 days…. Align yourself in the right vehicle first. Then commit.
2. Be Willing to Commit. Once you have the right vehicle, don’t try Network Marketing. Don’t be a dabbler then complain it doesn’t work. Commit to yourself. Commit to your growth, skill-set and mindset – and you will have success.
3. Find a Road Map. Experience is a great teacher. It’s also painful and expensive at times. The best short-cut to success is learning from other people’s experience and leveraging their learning. Find yourself a great mentor or coach and work with them to reach your goals. If you don’t have one yet, grab my free roadmap from the links below.

 

Get in your vehicle, get a road map and commit to the journey – because it’s worth it.

 

Andrew Logan

 

Andrew Logan is a Network Marketing Author, Coach and Mentor.
You can access more free training on his YouTube channel here and his Podcast here.
For your Free 7 Step Guide to Financial Freedom Through Network Marketing, click here.