MLM Truth: Direct Sales vs. Network Marketing
by Debbie, aka AlbertaRose
The fundamental differences between Direct Sales and Network Marketing are really quite simple: Direct Sales is a few people doing a lot; Network Marketing is a lot of people doing a little.
Imagine you have a product or service and you would like $1,000,000 in sales during the course of the year. Using the conventional method of Direct Selling, you could be forced to hire 100 people, imposing a sales quota of $10,000 per sales person.
100 sales persons x $10,000 = $1,000,000
Whereas, with Network Marketing you reverse the numbers to achieve the same results.
10,000 sales persons x $100 = $1,000,000
Well, you're saying to yourself, "Self, I'm no good at selling, so this isn't for me." Wait a minute! You're already doing it. The problem is, you're not getting paid for it! "What?" you say. "How can I already be doing it? I haven't joined anything. I don't even have my own business."
You sell something every day - you. Every time you have a conversation with someone - suggest a book, movie, restaurant - you're selling your ideas or opinion. This is called word-of-mouth. Can you imagine using this same concept through the Internet? Word-of-mouth now takes on a more poignant and broader meaning. Why not get paid for something you're already an expert at?
"Expert?" you ask. Yes, you are an expert. You paid to see the movie. The people you recommended the movie to also paid to see it, right? And the people they recommended it to... and so on. Now, did you get paid for referring this movie? No. Did anyone you recommended it to get paid for recommending this movie to others? No. The only person who got paid was the person who owned the theater.
Wouldn't it be better if you got paid too? That's why Network Marketing is so popular and lucrative. You and everyone you refer and everyone they refer gets paid.
Network Marketing vs. Pyramid Schemes
Network Marketing is a method of distribution and compensation that has been utilized in the United States for over 50 years. The Direct Selling Association (DSA), based in Washington, DC, represents the Network Marketing industry. The DSA has existed for more than 100 years.
Over 1,000 Network Marketing firms distribute more than $50 billion dollars a year in goods and services. An estimated 8 to 10 million Americans are either part-time or full-time distributors. Millions upon Millions more are customers. The common myth about Network Marketing is that the Top Guys make all the money off the little guys.
The people who circulate this myth are usually those who define fairness in terms of everyone receiving the same benefits regardless of their own efforts and contributions. In other words, those who sit around and do nothing to earn their share should be paid the same as those who have been working and effectively promoting and contributing to the organization.
Network Marketing DOES work, and work well. Those who train, refer and motivate the most people earn the most money. If you sell or consume $50 worth of product a month, and you have referred 50 people who do the same, you will earn 50 times more than the person who only sells or consumes $50 of product a month. Is this not fairer? Why should you do all the work only to receive the same income as someone else who did nothing!?
Pyramids - A Pyramid is a structure where those at the top make more money than those below? This describes every conventional company in existance! The problem here is that the CEO is the recipient of the efforts and hard work of each person below and these people do not have the opportunity to earn as much as, or more than the CEO. Does a Vice President earn more than the CEO? or the factory worker earn more than the Owner or President of the company? No, not usually.
No matter what effort the factory worker exerts, they still maintain the same level of income and status. They will never have a higher income than those in upper management. This is how a Pyramid works.
But, with Network Marketing, you are building an income from the production of everyone in your WHOLE organization, whether you sponsor them or not. If each person in your own personal organization duplicates what you do, you have a situation where everyone has the same amount to gain. It's the fairest structure because everyone has the same opportunity to create the same situation. They can even surpass you! But, their efforts benefit you too. So it's a win-win situation.
Network Marketing is the fairest system by far because the success or non-success you attain correlates directly to the contribution and effort you've applied, personally. It's not based upon your position within the organization.
Residual Income - What is Residual Income? It's income that you receive, month after month, due to a one-time effort.
If you were going to do a one-time job, and you had two choices for getting paid, which of the following would you choose?
A) $50 one time
B) $20 per month for the rest of your life
Obviously, "B" is a much, much better deal. This, in essence, is a Residual Income benefit. If you are a qualified affiliate (most programs have their own qualification prerequisites), you can refer someone one time, then earn commissions on that referral every month indefinitely! Network Marketing Works!
One fact that very few know or expect is the "stall" mode. As your organization grows, you will experience what many call a "slow-down". In fact, it can actually stop and go backwards for a while! All marketers experience it. It is crucial that you persist in your marketing efforts because once you've moved through this "slow down", you will experience the true value of the Network Marketing paradigm. Also, as you continue your efforts you are continuing to learn - which is also very crucial for any business. After all, knowledge is power.
Have you ever tried to push a stalled car? It takes a lot of continuous effort to get it moving, but not nearly as much to keep it moving. Network Marketing is very similar. Once you've pushed it over the crest, it starts to gain momentum on its own, so much so, it's very difficult to stop, if not impossible. It is possible in to move your group through this period and into a sustained growth phase such that your sales organization continues to grow, regardless of what you do.
To accomplish this you have to hit the ground running once you've made your decision to take advantage of the opportunity Network Marketing has to offer. You have to push, give it all you've got until you crest that hill and your group starts to experience sustained growth on its own. It requires selling your products and referring as many people as possible until you find the ones who will duplicate your efforts and become leaders. Network Marketing is all about leadership. Once you find those who will inspire and lead in your organization, the momentum will become impossible to stop.
Now you should have a good grasp on the true benefits and the power of Residual income, for everyone concerned.
Wishing You Good Success!
Debbie, aka AlbertaRose
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About the author:
Debbie, aka AlbertaRose, has been working from home online since 2001. You can contact her at albertarose(at)earthlink.net or visit her website: http://www.albertarose.org/ Debbie has owned and operated two off-line businesses and one online business - successfully.
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