Network marketing is a distribution method in which customers inspire new customers. Companies that distribute their products in this way take advantage of customer satisfaction and thus avoid advertising costs. Products marketed in this way include nutritional supplements, perfumes, health drinks, other health products, etc. The image of network marketing in the Netherlands is quite negative. Is this correct?
Additional or main income
Network marketing is a distribution method in which customers inspire new customers. Customers/distributors are rewarded for their efforts to sign up new customers/distributors by receiving a commission on all sales in their line. For some customers this is a nice way to offset their own costs for purchasing the products, for other customers/distributors it is a way to earn a second income or a main income.
Worldwide, the number of people making money with network marketing is increasing enormously. In 2007, there were already 63 million people working in the network marketing industry (Direct Selling Associations). Figures from America and Asia indicate that ultimately about 5 to 10% of the population will be active in network marketing. Network marketing is not yet very popular in the Netherlands. The percentage of participants does not yet come close to 1%. There is also a lot of criticism of network marketing in the Netherlands. For example, it is compared to pyramid schemes. Another point of criticism is that many network marketers do not earn money, or that it even costs them money. Network marketing has probably acquired a negative image in the Netherlands because a number of disappointed people have sought publicity and some consumer programs and other media have eagerly responded. However, disappointments can also be found in every industry and wherever people try to make money. It’s just true that one person is more successful than another. Factors such as commitment, work ethic, creativity, proactivity, communication skills, courage and perseverance determine success, and not everyone is equally blessed with this.
On the website of the Direct Selling Association http://www.directselling411.com/for-sellers/myths-facts/ a number of myths and prejudices regarding network marketing are unraveled. For example, a study by this organization shows that 84% of people who practice network marketing indicate that network marketing fully meets their expectations in terms of acquiring (additional) income. It also explains the difference between network marketing and pyramid schemes and convincingly discusses other objections to network marketing. In America, network marketing is viewed completely differently than in the Netherlands, as evidenced by a video on YouTube in which former President Bill Clinton states that network marketing is a very interesting and respectable way of making money: http://www.youtube.com/watch?v =X_eGbfTPbGY Perhaps it also played a role in Clinton’s case that many MLM companies are located in America and that global growth in network marketing is also good for the flow of foreign exchange to Uncle Sam’s country. However, what is also reflected in Clinton’s video is that network marketing is an excellent way to take your financial destiny into your own hands. It is an opportunity for everyone to realize the American Dream.
In these financially troubled times, many people see their dreams shattered. The shares are causing headaches for investors, many who thought they had a stable job are now unemployed, companies that were doing well are now going bankrupt through no fault of their own, and the once considered solid stronghold of pension funds is showing a major breach. Dutch people will already have to work two years longer to retire, and when they reach retirement age in an x number of years, their seemingly comfortable pension could well have shrunk to a handout. The financial crisis has taught us that we are more economically vulnerable than we thought and that nothing is certain in economic terms. This also raises the question of what we can do to create more financial security.
The interesting thing about network marketing is that one cannot easily become unemployed. Network marketing companies don’t lay off employees. In addition, people receive pay for their work. Distributors who invest a lot of time and energy will also earn an attractive income. An income that can contribute to a pleasant lifestyle, but that can also be reserved as a nest egg. However, if you continue to invest time, not only will the reserved capital grow, but the network will also continue to grow, and with it the income from the network. Incomes of tens of thousands of Euros per month occur. Naturally, this largely depends on the time and energy invested. However, even if one is satisfied with a second income of, for example, 500 or 800 euros per month, this is a valuable addition if one becomes unemployed, wants to stop working earlier, or if the share portfolio has fallen sharply in value.
Getting up to speed
The hardest part of network marketing is the beginning. One needs to find a number of people who want to use the products. These could be friends, family members, neighbors, colleagues, team members at the sports club, fellow students, etc. etc. Usually an informal conversation about the product and/or the additional income is sufficient to gauge whether someone is interested. If someone is interested, a demonstration of the product can be given or they can provide the other person with a free sample with written information. If a number of new network marketers have been gathered in this way, they should be supported with tips and knowledge in expanding their network. When they also do their thing, the network grows successfully; 2 becomes 4, 4 becomes 8, 8 becomes 16, 16 becomes 32, 32 becomes 64, 64 becomes 128, and over time so-called downlines are created with thousands of people. Not all of them need to be supported. Each networker only supports its first layers. That is why there are quite a few network marketers who make good money with relatively little time investment. They enjoy the energy they put into it in the first period for a long time. Network marketing is a bit like turning on a steam train; Initially it goes slowly, but when the train is up to speed it becomes easier and easier to gain speed, and every now and then you just have to throw some coal on the fire. in fact, the principles are very similar to those that apply to commission salespeople or other self-employed entrepreneurs; Turnover gives reward, those who manage to get many customers will gradually find it easier and earn more money. It also applies that customers must be kept satisfied and that lost customers must be replaced by new customers.
Anyone considering starting network marketing would do well to choose a product that can get them excited. Enthusiasm helps enormously to convince others and also to delve into the properties of the product. The product must also meet the following requirements:
- High quality.
- Preferably unique.
- Preferably innovative.
- Not available in stores.
- Having the power of persuasion or providing good supporting information.
- Is aimed at a growth market.
Obviously, the company that produces the products must be reliable and have good business operations. Some reassurance is immediately in order here; companies that distribute their products through network marketing rarely go bankrupt because they focus on growth markets and usually have low costs. This also distinguishes network marketing from stock trading, other work, and pension provisions, as it offers quite a lot of security for the future. The compensation plans or commission system of companies may differ. There are compensation plans with the following names: Stairsteps-Breakaway plan, Matrix plan, Uni-level plan, Binary plan. According to experts, it is difficult to say which plan works best. All these systems work well, which is evident from the fact that they keep marketers happy. However, make sure you are well informed about the plan used by the company you will be working with. It often contains subtleties that are important to know. Not only for yourself but also for the new marketers you register. For example, in some compensation plans you are only entitled to commission if you are registered for an automatic order for a package for your own use. Not getting a commission for the work you have done because you don’t know the rules of the game is extremely disappointing. It is also important that the company actually delivers to users through the marketers. There are companies that exist mainly from the high entry prices for new marketers. That can cause major disappointments. Also, don’t be forced to buy a huge amount of products at the start. Companies that work with high entry prices and large initial orders characterize themselves as a pyramid system. In fact, they live by deceiving people who are looking for an opportunity to make money.
Pleasant tasting fruits
The following warning is also appropriate. Anyone who practices network marketing is completely free to determine how much time and energy he/she invests in it. Getting rich while sleeping is not an option. Just like in any other business endeavor, to achieve success one must be active, creative, perseverant, daring, socially skilled, and helpful. Anyone who starts up with this realization will enjoy it for many years to come. The fruit on the tree of network marketing can taste very pleasant; independence, no boss to control and push you around, free to organize your time, vacation as often as you want and your budget allows it, the possibility to also work abroad, it is very nice to see how your network expands automatically over time and with it your income, etc. etc. And, the investment in time that you make is probably more stable in value than financially investing in shares or paying a premium to a pension fund.