Dissecting the Network Marketing Industry

by Claudia Rodriguez on December 12, 2011

Robert Kiyosaki says if you want to be rich, you need to own a large business and you need to build a strong network. Franchises are one example of a large business. For those that don’t have an extra million dollars lying around to invest though there is network marketing, a business model that has been called a personal franchise. If you are serious about becoming a successful entrepreneur and are willing to learn, the network marketing business model may be of interest.

The information age which began in the late 1980’s has changed the way we buy and sell products which has been beneficial to the network marketing industry. Network marketing is an often misunderstood industry and many even have a negative opinion. More often than not those don’t really know everything it entails. Therefore lets begin with a definition. Network marketing falls into the category of direct selling. Direct selling is one-on-one, and the salesperson gets a commission based on their sales. Network marketing is also one-on-one however, the distributors create a network of customers and distributors. Companies use this business model to distribute their products. The company eliminates the middlemen and sells its product directly to consumers.

The company’s distributors (the same people who use and love their products) are the ones who do the marketing. These distributors build a network of consumers and distributors, and get a commission on the products people in their organization sell and consume. In network marketing you get paid based on your results and I find it funny that people think this is an unfair business practice. If you market the product well, and people start consuming the product or better yet if a person wants to become a distributor, a commission is paid. If you do nothing and get no results, you don’t get paid.  It seems there is nothing more legitimate than that.

Network marketing can be the answer for those who are committed to becoming successful entrepreneurs. One of the greatest benefits that network marketing provides is that you are able to do it part time. Most people who do become involved in this type of business have full time jobs. In network marketing it’s about your results, not about the hours you invest. Therefore, if you invest 15 hour a week wisely, you can start building your business. Many of us don’t have the skills needed to become an entrepreneur but in network marketing you work with a supportive team. Usually the person who invited you to join the company will teach you the skills needed to succeed in your business.  A great book by Robert Kiyosaki, “The Business School” gives a list of some of the skills a good network marketing system will teach you such as selling (which is the number one skill in business), leaderships skills, communication skills, people skills, an attitude of success, overcoming fear of rejection, time management skills and goal setting. These are the same skills that will create a solid foundation for everything else you do in business and in life.

If this is the first time you’ve heard of network marketing, or if you’ve heard negative comments about it in the past, I would encourage you to do some research to learn more. Entrepreneur.com has great articles on the industry and several successful businessmen and women agree on this type of business model including Robert Kiyosaki, Donald Trump, T. Harv Eker, Warren Buffett, Darren Hardy, Paul Zane Pilzer, Suze Orman, Don Failla and many more. If you want to be successful only take advice from those who are where you want to be.

It’s important to note that not all network marketing companies are equal.  If you want to get involved in a network marketing company here is a list of what I think is important to look for:

  1. Try to make sure the company is legitimate. MLM Insider has a directory of network marketing companies of which you can search based on product category, compensation plan or years the company has been is business. This is important because some illegal pyramid schemes disguise themselves as legitimate network marketing businesses. Typically, the fewer years the company has been in business the more likely it is they will go out of business. I recommend a company that has been around at least ten years. The compensation plan is how the company is going to reward you for the sales of your organization. The newest form of compensation, and one that has been voted the best, is the binary structure.
  2. Look for a company that sells a product you like. The Direct Selling Association’s website has a list of the companies and the product/service each one sells. You won’t be successful if you sell something that you don’t like or don’t use yourself.
  3. After you find a product you like, make sure the product is consumable. It’s important that the product you are distributing will generate repeat sales. An internet service provider for example bills their customers monthly whereas a person who sells say a set of knives only makes a one time sale.
  4. Choosing to work with a company that is publicly traded may be a better option, although there are many legitimate smaller, privately held companies as well. Transparency is the biggest advantage of working with a publicly traded company since they are required to disclose their financials. This way distributors can easily track where money is being invested.

The publisher of Success Magazine, Darren Hardy, said “This country was founded on entrepreneurialism and we are returning to it. The future of employment is self-employment. Direct selling is one of the few business opportunities that offer average people with above-average ambition a way to achieve an above-average lifestyle, peace of mind and financial security.” A good network marketing system gives the training to build great entrepreneurs, the only thing you have to do is to be willing and determined.

Claudia Rodriguez has been involved in the network marketing industry for over 3 years and currently works with USANA. She gives health and wellness workshop and also enjoys writing, dancing, and reading. You can e-mail Claudia at klakli@usana.com.

{ 13 comments… read them below or add one }

Gerardo Alarcon December 12, 2011 at 11:24 am

Great Article, I hope this article helps many people understand a misunderstood business that can change many peoples lives

Adrian Childers December 12, 2011 at 11:56 am

This really is a great article!! I don’t think anyone doubts anymore that network marketing is a legitimate business, it’s just like every other business where you have a few bad apples that sometimes give an entire industry a bad name.

I first met Claudia at Starbucks through a mutual friend. It’s an interesting lifestyle you live if you are successful in this industry because you get to meet and talk to a lot of interesting people. If you hustle, give people what they want and are able to build a strong network anyone can be successful in this industry. It’s just all about building that initial foundation at the very beginning.

Montserrat Pastrana December 12, 2011 at 1:52 pm

Me encantoooooo el articulo!!!! Clau queria pedirte de la manera mas atenta si lo pudieras traducir al Español pues quisiera pasarselo a muchos amigos, te lo agradeceria muchisisimo y te felicitoooo de todo corazon, eres una maestra en el arte de las finanzas, y verdaderamente el mercadeo en este tiempo es LA OPCION!!!! besos!

Gustavo Rodriguez December 12, 2011 at 2:37 pm

Excelente articulo con referencias inobjetables,datos duros y se nota el profesionalismo,decia un maestro que la preparacion no se puede maquillar, o la tienes o no la tienes.

Felicidades Clau son notables tus conocimientos,dedicacion y TUS RESULTADOS.

Gustavo Rodriguez December 12, 2011 at 2:40 pm

Excelente articulo con tremendas referencias,datos duros y se nota el profesionalismo,decia un maestro que la preparacion no se maquuilla,se tiene o no se tiene.

Felicidades Clau tu la tienes de sobra y TUS RESULTADOS LO AVALAN.

Dennis Lopez December 12, 2011 at 6:06 pm

Es una placer leer articulos tan bien detallados y tan informativos. Realmente convincente!

Felicidades Claudia.

Sally Rochel December 12, 2011 at 6:58 pm

What an awesome article, so true! Congrats my friend, your words reflect your determination and belief in what you do. You are in the right path to success, very proud of you!!

Adriana December 12, 2011 at 11:18 pm

Love it! It’s the best way to start your own business and creating wealth. I’ve always believed you don’t put all your eggs in one basket and network marketing is the best way to start investing in your future, your wealth with a very small capital.

Thanks for explaining it in a very simple way.

Gloria Espinosa December 13, 2011 at 3:02 am

QUE EXELENTE INFORMACION!!!!!!! QUE INCREIBLE ARTICULO……..CLAU ERES UNA PROFECIONAL !!!!!

QUE RIQUEZA ….. MEJOR NO PUDO ESTAR.
MUCHAS FELICIDADES .

PD. SI NOS LO PUDIERAS TRADUCIR AL ESPAÑOL PARA PODERLO REENVIAR SE AGRADECERIA MUCHO.

Cecilia Jackovich December 13, 2011 at 7:52 am

Awesome article!! Can’t agree more with your statement “The future of employment is self-employment” Corporations don’t offer what they used to, plus the stress level is usually high!
Well written Clau!!

P "Sabina" Munoz December 13, 2011 at 10:07 pm

This is a great business model but only if you are personable and self-motivated professional.
Like everything else in life…there are many points of view, some based on educated opinions and some on ignorance.
I am just a client, and the only thing I can honestly say is: It works great for me, I love my health products, and they worth every cent!!!

Rosana Santamaria December 19, 2011 at 1:08 pm

Estoy totalmente de acuerdo con los demás comentarios, definitivamente un articulo muy completo e interesante, para mi punto de vista con una excelente información.

Muchas Felicidades Claudia!

Estoy orgullosa de ti..

Adriana Mendoza December 30, 2011 at 9:07 pm

Excelente articulo! Un resumen con las bases necesarias, la experiencia vivida, los resultados obtenidos que respladan cada opinion. La mejor opcion para quienes estamos comprometidos en generar riqueza a traves de un ganar-ganar con el equipo de trabajo, apoyando a quienes se convierten en verdaderos amigos. Felicidades Clau, por ser una extraordinaria Empresaria y un Ser humano maravillosa!

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