Network Marketing-The Basics
Posted 1st January 2012 at 02:05 AM by paul64
Updated 1st January 2012 at 02:06 AM by paul64 (Removed hyper llink)
Updated 1st January 2012 at 02:06 AM by paul64 (Removed hyper llink)
If you've been researching for the right business to get involved with you've probably noticed that there are gazillions of opportunities out there. This can be somewhat overwhelming and confusing for the newbie because each "biz opp" is claiming to be the best and will give you a whole bunch of reasons why you should join them. I too, could give you a dozen or so reasons why you should join me but that is not my purpose for this post. I want to help clear away any confusion you might have regarding starting a network marketing business, and I'm going to do that by sharing with you some basic knowledge about the various kinds of business models available online today.
Even though there are thousands upon thousands of "business opportunities" out there, they are all designed around basically two business models. These are:
1) Direct Affiliate Marketing
With this kind of business model you market and sell other peoples products, usually digital. The most common of these being eBooks, and membership services for a wide range of markets. Affiliate marketing can be very lucrative, however, there is a rather vigorous learning curve that you must embark upon to become successful. A good place to begin learning all about this kind of business model would be the "Warrior Forum." In fact I strongly urge you to sign up and start reading and asking questions, you'll learn a lot.
2) Network Marketing
This kind of business model is ideal for newbies because when you join up you join a vast network of marketers who are there to help you every step of the way. So how does network marketing work? Primarily through team effort, that is to say, you have a bunch of people all working to help each other succeed. The basics of network marketing work like this:
a) Market the companies products, to the masses on the Internet, and in your local area.
b) Build up a sales and marketing team of you own (sponsoring). Sponsoring new people into your business is a vital component for network marketing to work.
c) Teach others on your team to do the same (Duplication). Duplication is a "key factor" in generating marketing and financial leverage. For example, lets say you're earning $1000 per month from your own effort. Lets say you teach John to do exactly what you're doing to earn $1000 every month. John earns $1000 per month so your network marketing company will begin paying you a leadership bonus for teaching John how to market and build his own business. This bonus leadership payment is ongoing and typically falls in the range of 3% to 10% of Johns monthly commissions. It's important to note that no money is taken from John's commissions to pay your bonus, this should come from the companies commission pool generated through product sales. So there you have it, three simple steps that form the basis for a thriving network marketing business. Add to this a marketing strategy and you're well on your way to creating your own profit generating business.
Advertising budgets:
Every single business in this world must have an advertising budget so they can market and sell products or services. Traditional business spends this on newspaper, television, radio, magazine, and Internet advertising. Now some companies literally spend hundreds of thousands, if not millions of dollars on advertising annually.
Successful network marketing companies also have huge advertising budgets, however, how they spend it differs greatly from traditional business. Network Marketing companies allocate a large percentage of their advertising budgets to their distributors (business owners like you and me). Every distributor is considered part of one huge advertising medium because each individual business owner (distributor), within a network marketing company, will be advertising the companies products and business opportunity using and paying for whatever kind of advertising they choose to engage in.
For example, I have my own monthly advertising budget that I use to market one of my company'sproducts and business opportunity. They in turn pay me a commission out of their advertising budget every time I sell a product. Moving (selling) products and services is what really counts here, and because of the Internet this sales process is primarily automated. This means I'm not actually doing any "selling," the system does that for me. All I have to do is get on with advertising and building my team.
So there you have it, hopefully I've been able to clear up any confusion you may have had concerning network marketing. Remember, there are three basic components that a network marketing business needs to work:
1) Sell product
2) Sponsor others
3) Teach others these three simple steps
Do this with persistence and you'll grow a thriving network marketing business.
To your success
Paul Beamon
Even though there are thousands upon thousands of "business opportunities" out there, they are all designed around basically two business models. These are:
1) Direct Affiliate Marketing
With this kind of business model you market and sell other peoples products, usually digital. The most common of these being eBooks, and membership services for a wide range of markets. Affiliate marketing can be very lucrative, however, there is a rather vigorous learning curve that you must embark upon to become successful. A good place to begin learning all about this kind of business model would be the "Warrior Forum." In fact I strongly urge you to sign up and start reading and asking questions, you'll learn a lot.
2) Network Marketing
This kind of business model is ideal for newbies because when you join up you join a vast network of marketers who are there to help you every step of the way. So how does network marketing work? Primarily through team effort, that is to say, you have a bunch of people all working to help each other succeed. The basics of network marketing work like this:
a) Market the companies products, to the masses on the Internet, and in your local area.
b) Build up a sales and marketing team of you own (sponsoring). Sponsoring new people into your business is a vital component for network marketing to work.
c) Teach others on your team to do the same (Duplication). Duplication is a "key factor" in generating marketing and financial leverage. For example, lets say you're earning $1000 per month from your own effort. Lets say you teach John to do exactly what you're doing to earn $1000 every month. John earns $1000 per month so your network marketing company will begin paying you a leadership bonus for teaching John how to market and build his own business. This bonus leadership payment is ongoing and typically falls in the range of 3% to 10% of Johns monthly commissions. It's important to note that no money is taken from John's commissions to pay your bonus, this should come from the companies commission pool generated through product sales. So there you have it, three simple steps that form the basis for a thriving network marketing business. Add to this a marketing strategy and you're well on your way to creating your own profit generating business.
Advertising budgets:
Every single business in this world must have an advertising budget so they can market and sell products or services. Traditional business spends this on newspaper, television, radio, magazine, and Internet advertising. Now some companies literally spend hundreds of thousands, if not millions of dollars on advertising annually.
Successful network marketing companies also have huge advertising budgets, however, how they spend it differs greatly from traditional business. Network Marketing companies allocate a large percentage of their advertising budgets to their distributors (business owners like you and me). Every distributor is considered part of one huge advertising medium because each individual business owner (distributor), within a network marketing company, will be advertising the companies products and business opportunity using and paying for whatever kind of advertising they choose to engage in.
For example, I have my own monthly advertising budget that I use to market one of my company'sproducts and business opportunity. They in turn pay me a commission out of their advertising budget every time I sell a product. Moving (selling) products and services is what really counts here, and because of the Internet this sales process is primarily automated. This means I'm not actually doing any "selling," the system does that for me. All I have to do is get on with advertising and building my team.
So there you have it, hopefully I've been able to clear up any confusion you may have had concerning network marketing. Remember, there are three basic components that a network marketing business needs to work:
1) Sell product
2) Sponsor others
3) Teach others these three simple steps
Do this with persistence and you'll grow a thriving network marketing business.
To your success
Paul Beamon
Total Comments 2
Comments
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Hi Paul,
Network marketing is a simple model. The problem is, most people don't have the persistence you speak of in your last line. Great info!Posted 7th January 2012 at 12:26 PM by David Sneen
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Thanks David, that's true. One way I get around this is to focus only on the "workers". Basically I don't waste time trying to motivate people who don't want to work. In my experience it's always been the few motivated individuals who make a Network Marketing business grow.Posted 23rd January 2012 at 07:02 PM by paul64
