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Home Business Industry and Network Marketing

By Paul Shala, Direct Sales Veteran. December– 2016

Everyday more and more people choose to work from home. You probably know someone who does. Maybe they approached you

Paul Shala

about an opportunity to join them or you heard about it through the internet. If you’re not familiar with the home business or Network Marketing (NM) industry, it’s perfectly understandable that you may have questions such as:

•  What is the home business?
• What does it mean?
• How does it work?
• Is it legitimate? and most important question might be:
•  How do I make money?

Hopefully will answer some of these questions and others and you will be able to have a understanding and know if this industry is right for you.

The Home Business Industry

What is a Home Business? Sounds pretty simple, right? But the reality is that this industry is often misunderstood. Did you know that according to a recent report released by the US Census Bureau, that 49% of all US businesses are home based. There are over 20 million home businesses in the US alone with a new one starting every six seconds.

Changing Lives Joyfully

Worldwide it’s a staggering $427 Billion a year industry. A Home Biz is a business that an individual can operate from home. It includes many traditional businesses such as web design, fashion, technical services/repair services and many others. But we are talking about a very unique and rapidly growing concept that has distinct set of advantages over the more traditional businesses. Unlike the other businesses mentioned, this concept typically requires:

• No past experience  * like start up capital
• No accounts payable
• No accounts receivable  * no inventory
• No employees * nor the headaches, expenses, licenses, certificates and overhead that come along with traditional business.

The kind of home business we are going to talk about is you can work part time, full time, or even in your spare time. You’re the boss.  So you decide, In short this business offers far greater flexibility, eliminates the cost, expenses and other drawbacks of traditional business. Yet it offers tremendous potential often with less investment. So what is this business called? It is known as

“Network Marketing”.

What is Network Marketing (NM)? What does it mean?

Well it may surprise you but it is something that you do everyday. NM simply means word of mouth advertising. Essentially recommending something to someone else. If you take a moment to think about this; it is something we all do on a regular basis. We refer friends to our favorite restaurants, movies, vacation spots, books, stores, doctors and any other number of products that we like to people we know. It’s simply part of our nature. The fact is we are all network marketers. It’s just who we are. The difference is that most of us do not get paid to do this but some people do and they get paid very well. As we will learn here that they get compensated far more than their personal recommendations.

Let’s look at an example: You recommend a restaurant to a friend and they decide to go there and enjoy a great meal. Some of them enjoy it so much and they go there again and again, they bring friends and they tell others too. That is a lot of business resulting from your recommendation. Now is the restaurant owner going to compensate you for referring him business? Will he reward you for the referrals? Or every time people return? Of course not. Even though you did provide the word of mouth advertising and advertising costs money, right? This is true for book publishers, movies, etc. Well in NM, this is exactly what you get paid for, very well in fact for simply doing what you already do. But it goes much deeper than that.

Sharing not selling

Before we cover how you make money, let’s put the industry in a very clear prospective and understand why so many great companies choose the network marketing model in the first place. When a company has a product that need to get it to the end user, they face a very big and costly challenge. They can hire sales people, train and equip them, put them in an office, pay them a salary, and cover their expenses or they open stores and sell their products from traditional brick and mortar store fronts, or they can cut their margins even further and have their products sold in other stores. Now with all these expenses that these options cover comes yet another very large expense: Advertising. Building a brand and exposing it to the masses is not an easy task; with just one 30-second TV slot costing potentially $10′s to $100′s of thousands of dollars. Plus radio, magazines, newspapers, billboards, direct mail, etc. It’s not surprising that advertising is one of if not the largest expense of a company. Worse yet, all these expenses are incurred before a single product is sold.

Introducing Network Marketing

A Business Model that doesn’t just eliminate advertising expenses but also associated costs such as: hiring, training sales force or opening stores and courting supplies. In stead they just pay you. It’s brilliant if you think about it. The company pays out after the sale is made rather than risking huge sums upfront. They don’t have to advertise and the result in profit margins are dramatically higher that leaves a lot of money on the table for people like you and me. In fact it’s not unusual for companies to pay out 50% or higher of their profit revenues that they bring in. With some companies doing hundreds or in excess of a billion a year, that is a big piece of a very big pie. Now here is where it gets very exciting. Since NM doesn’t advertise and you are but one person; they attain widespread exposure another way.

The result is that you are not only rewarded for your own referrals but for the viral exposure you’re referrals create. Think about it like this: Imagine someone shares an online video with you; you watch it; and think it’s great and forward the link to people you know. Then many of them do the same and so on. Before you know it; the video is being viewed worldwide. This is known as viral marketing and we all do it everyday.

NM works on the same concept. The goal is to have your referrals turn into more referrals and product sales spreading from one person’s network to another and another. To encourage this referral exposure, NM Companies compensate you not just for finding new customers but for finding new referrals who in turn find new customers and referrals. However, this model is not unique to NM: a real estate office, insurance agency, book publisher/sealers work the same way.

NM simply gives regular people without a product or professional skills of their own the very same opportunity to own a business. This leverages the effects of others. This is just one of the many beautiful aspects of the NM industry. The company is more efficient; the people earn more money for sharing with others and in the end the customer wins as well because they have access to products and services from people they know and trust; with this model everyone wins.

IS NETWORK MARKETING LEGITIMATE?

You may not recognize many of the NM Companies that use the NM model for their distribution.There is a good reason for that. As we just explained these companies do not use traditional sales and advertising channels. Even with this said, you may recognize the following companies: IBM, Gilette, Colgate, AT&T, Avon, Tupperware, General Electric, Citibank, Xerox, Texas Instruments, MaryKay Cosmetics. These companies distribute some or all their products through NM. More than a few billionaires now own NM Companies and many of NM Companies are publicly traded in the stock exchange. The fact is that NM is 100% legal, legitimate, and a respected business model so long as the company is engaged in the sale of real products with real value to the marketplace. In other words, there has to be real demand and real value beyond the opportunity to make money.

The confusion often comes with what people think is a pyramid scheme. A company in an illegal situation where new people are recruited to pay the people above them and no real value trading hands ultimately the people at the bottom are left holding the paper with nothing to show for their efforts. As with any other opportunity, evaluate the one you’re considering carefully. If it is hard to see what the product is or even if there is a product other than making money, stay away from it. Know the fact that NM is legal and an opportunity rich model that attracts more and more people every year.

HOW DO YOU MAKE MONEY IN THIS INDUSTRY?

Have you ever wondered why some people make $20,000 a year while others make $20,000 a month. They are both working with the same 24 hour days. Basically whoever creates greater value of their time makes more money; it’s that simple. This cornerstone concept will forever change the way you think about making money. NM offers 3 distinct advantages: Residual, Compounding  and Leveraging.

In this respect each in which create far more value with the same amount of time. Keeping in mind that this is a skill based business and teaching these simple skills will build your business. Residual income provides a number of benefits and rewards among the highest being the ability for financial and time freedom; in other words, greater income, more time to enjoy it as well.

There is essentially 2 types of income:

LINEAR INCOME and RESIDUAL INCOME. Only one of these produces this attractive result. Linear Income is what you receive from a job; you work you get paid; no work – no pay. In essence you are trading your time for a fixed amount of money. To earn more you have to work more hours. With linear income, it could be very hard to get ahead because when the work stops, the income stops too.

Now with residual income sometimes referred to as passive income or recurring income is when you do something once, but continue to get paid over and over again. With this type when the work stops, the income can continue long after the initial effort just as a subscription based service or the movie rental Net-flex. Residual income is the cornerstone of NM. Let’s say you share a product with ten people in January who make a purchase and it’s something they want each month. Although you found these people in January, you will be paid each month thereafter as long as they remain a customer. Now which would you prefer given the choice: work hard and paid once or work hard and get paid month after month; year after year. As you can see residual income is an opportune concept for building wealth.

COMPOUNDING EFFECT

The underlining engine that produces incredible success in NM is the power of compounding. Consider this: if you were to choose between having a million dollars in cash or a single penny doubled daily for a month; which would you take? If you are like most people, you’ll take the million and like most people you would miss out on a whole lot of money. Do the math and you’ll be surprised to know that the penny on day 30 compounds to over $5 Million. Just like a subscription based service, like the movie rental net-flex; residual income is the the cornerstone of Network Marketing. For example: say you find ten people in January who make a purchase and it’s something they want each month.

Although you found these people in January, you’ll get paid every month thereafter as long as they stay a customer. Now there is nothing wrong with linear income; but given the choice which would you take. Work hard and paid once or work hard and get paid month after month and year after year. Let’s take our penny example and apply it to an illustration in building a networking marketing organization. If you enroll only one new member and you teach that new person to do the same and the duplication continued, you would have over 4,000 people in your group in a year.

Imagine earning a percentage residually from all these people each and every month; pretty incredible. Now the reality is that not everyone will enroll one person each month; some will do more and some less; however, the power of compounding is truly a remarkable concept and one of the many reasons why people are able to supplement, replace or even surpass a full time income in a surprisingly short amount of time.

Leverage

John D Rockefeller often regarded as one of the richest persons in history stated it best when he said “I rather have 1% of the efforts of 100 people than 100% of my own effort”. To state it another way: money alone is nothing without the time to enjoy it. What compounding is to income; leverage is to lifestyle. Leverage is what gradually increasingly removes personal effort from the income equation by turning other people’s efforts into their personal potential.

When you start a Network Marketing business; you are immediately afforded these opportunities: you are your own boss, you are in control and your efforts dictate your success. That can change very quickly and in an amazing fashion. With the right company:  you’ll have the right products, established reputation, proven tools, and a system at your finger tip. Together they offer you the opportunity to build an ever growing organization of eager business owners with the same incentives. Compounding, leveraging, residual income all work together. They provide a very unique and profitable opportunity to naturally build your income as well as time freedom.

Requirements for an IDEAL Company

1. Positioned on the FRONT END of multiple LONG-TERM TRENDS.Health, wellness, and anti-aging are multi-trillion dollar industries with LASTING DEMAND because millions of baby boomers move toward their golden years. Job security is a thing of the past. Millions of people are looking for a simple way to boost retirement resources, increase their disposable income, have the flexibility of working from home, or escape the rat race completely.
2. HIGH-QUALITY, unique, convenient, value-priced products.This is a critical principle to understand and appreciate! It’s the KEY that allows you to build repeat customers and life-long residual income. Very few companies provide ALL FOUR critical components listed here. Two more deserve mention that many other companies often forget — The products need to taste great and usually provide noticeable results fairly quickly.
3. GENEROUS, SIMPLE pay plan that offers very significant income UP FRONT. Part-time distributors must be rewarded for their efforts and be able to make money quickly. Then, they can stay plugged in long enough for the real benefits of long-term residual income to kick in. Need to have a lucrative Fast Start Program and great residual bonuses available to part-time distributors on the first few levels. Qualification requirements are achievable for part-timers. The compensation plan is simple so that you can understand how you get paid and easily teach it to others.
4. High level of AUTOMATION. The challenges of NM must be dramatically reduced or eliminated. People are too busy today for ineffective practices and methods. Your TIME is your most valuable asset. Company should not require distributors to do unpopular things — no inventory, no shipping and handling, no deliveries, no paperwork, no meetings or seminars to attend, etc. And you can get a personalized, replicated website for marketing the program.
5. “SIZZLE” product that has universal appeal and stands above the competition.This makes the initial sales process a lot easier! It also means you can retain your customer base longer and more easily. Whereas some “magic miracle juice” with unspecified or questionable ingredients may create TEMPORARY excitement, the products need to bi rich and well-known, popular ingredients with a proven history of effectiveness. The products need to create noticeable results and long-term loyalty.
6. Not too many products. Having to choose between a large number of products is confusing for customers and distributors. Moreover, many companies, instead of providing combination products that make it simpler and less expensive for customers, put very little value for the dollar in each one of their products. In contrast, Just a few premium, combination products that make it easy, affordable, and convenient for entire families to take the products.
7. Consumable products that provoke a positive EMOTIONAL response and start a GOOD HABIT. Product results ensure repeat orders. Product loyalty is essential to the creation of significant, long-term residual income.
8. Products that truly improve a person’s QUALITY OF LIFE Distributors must be proud of what they are doing and they must have a sense of mission about their business. Mission produces passion; passion produces momentum; momentum produces success.
9. Company TIMING. It’s been said that TIMING IS EVERYTHING. Most millionaires are made in this industry when they find a solid company with GREAT PRODUCTS and get in early. The should bi debt-free and the Founder and CEO, and the executives should have a proven success track record and a commitment for staying in business for long term. Must have a lucrative, progressive compensation plan and offering of unique, outstanding products, and a mindset to help millions create and maintain serious health and wealth.
10. Very reasonable start-up cost. The potential should bi unlimited. Anyone who really wants to can get started with a Fast Start Pack and secure a replicating website. The part-time person and/or newcomer can easily participate and make money quickly, The door is wide open for massive growth and financial freedom.

How to Choose the Right network marketing company!

5 Major factors to consider when choosing the right network marketing company that will suite you. Each factor is critical to the success of your business. Highlighting these factors.They are the Company, Management, Product, Compensation, and Experienced Team/Marketing System. Be sure that no matter which opportunity you choose, that it is one that has honesty and integrity.

Company

1- Public or Private?

A Privately held company or a Publicly held company is best?.Public companies are required to publish reports where private companies aren’t. However, Public companies also serve 2 masters… the share holders and the members/affiliates/distributors/representatives. Because of this balance of positive and negative, there is no better or worse as far as Public or Private. Private companies are often far more flexible to adjust to market demand, where Public companies have to always think about their share holders and what will put more $$$ in their pockets.

2- Well Capitalized & Financially Stable:

3- Credibility: 4- Timing:

Management/Founders

1- Experienced: 2- Visionary: 3- Research and Development:

Product line

1- Products people already use or TRULY need:

2- Reasonably Priced: 3- Unique:

4- Consumable: 5- Highest Quality:

Compensation Plan

1- Low Qualifications: 2- Two Kinds of CompressionCompression of Levels/Compression of Volume.

3- No Glass Ceilings: 4- No Limit on Income:

5- Part-Timer/Full-Timer plan – Find a Balance:

6- Profit Sharing Concepts:

7- Bonuses & Benefits: 8- Customer/Marketer:

Team/System

1- Experienced Team: 2- Huge Group Support:

3- Word for word system: 4- Technical Support:

5- Automate Online Marketing System:

2 Other important Points.

1 – No Large Monthly Requirements: 2 – No Large Start-up cost:

BE CAREFUL!!!

Do detailed research. The right Company, Management, Product, Compensation, and Team combined with work, time, energy, commitment, dedication, education, motivation, and excitement will create anyone the success that they desire.

Conclusion

The reality is that there are great jobs and there are great professions, and great businesses, but how many do you know that afford ordinary people regardless of age, education, skills or background such an extraordinary potential to achieve the financial and time freedom and lifestyle rewards of Network Marketing. How many do you know where everyone begins on an equal playing field with virtual unlimited potential and where the success of one does not put anther’s job or promotion in jeopardy; rather it leads to the success of both. Hopefully this has removed some network marketing myths, answered some of your questions and brought you closer to giving this opportunity strong consideration.

Paul Shala, Direct Sales Veteran,       shalasuccess@gmail.com