Network Marketing - How to earn an extra income from home

Many people have made fortunes in network marketing business opportunities, also called multi-level marketing / MLM.

“Marketing” is the word commonly used to describe what companies do to let people know about them or their product/service.

Traditionally companies use newspaper advertisements, television, etc in order to achieve this. Multi-Level Marketing companies do not use these “traditional” forms of advertising though; they use people instead to do the advertising for them. These people who then market the Multi-Level Marketing company’s product/service are known as distributors or Independent Consultants/Associates. Because of this, Multi-Level Marketing is also known as word-of-mouth marketing/advertising.

Now, while traditional companies spend millions of rands on advertising per year, Multi-Level Marketing companies choose to do their advertising through people as stated above. Instead of paying the newspaper or television station for the advertising, Multi-Level Marketing companies like Multisure and Passive Incomes pay anyone (Independent Consultants/Associates) willing to assist with recruiting others, a commission for spreading the word about its services/products. Because of this feature Multi-Level Marketing has become the fastest growing industry in the world today.

Not much has changed over the years and this is still this is one of the most rewarding home business opportunities today. The majority of companies offer products and services that the average person uses on a daily and consistent basis.

Today we have products like communication services, internet access, nutritional products, water filtration systems, financial programs and this makes choosing a company all the more difficult.

It is a businesses in which anyone can invest a small sum of money and through sheer tenacity achieve staggering levels of financial reward and personal freedom. But it requires education based on market tested results.

It is a relationship business and it is about helping people build a business or focusing on your customers for your products and services. Network Marketing really is an unseen business and it is all about sales.

Network Marketing does not have giant signs or large offices, yet according to the Direct Selling Association (DSA) over 13 million people in the U.S. are working in the network marketing / direct selling industry.

The Network Marketing / MLM industry has a very shady reputation. Many of the people you will talk to feel it is a scam.

Are they justified in this opinion? In many ways they are justified, but you can make a difference with the way you market your business.

In the 1950's when Franchise’s first emerged they where labeled a scam, illegal etc.

Fortunately a franchise is not labeled as such anymore or quite possibly you would not be enjoying your favorite hamburger today.

Let’s look at the two types of business models that you could be involved in or approached with:

Network marketing / Multi-level marketing (MLM)

They usually offer reasonably priced products and services that people consume in a short time. Generally the commission structure is less up-front then the direct sales companies, but it has a benefit that most direct sales companies do not have and that is residual income.

It costs much less to get involved with this form of business, usually only a few hundred rand.
Allows more people to become involved.
Builds Residual Income.
Leverages the time of others.

Network marketing is all about sales and distribution, but a different kind of sales. It’s more of a soft sale or recommendation then the hard closing type that you’re accustomed to with the typical salesman or saleswoman in the direct sales.

The best approach by far in network marketing is a consultative sales approach. This is used very successfully today.

Direct Sales Companies

These companies are known as seller-based, they market higher priced, usually one time sales items. The benefits of these programs are you make higher commissions but they have very little if any residual income. Essentially if you stop working so does your income.

You are paid directly on what you personally sell, so you have to sell lots and lots of merchandise. This also limits you to the type of people you can bring into your business as the “salesperson” type.

Direct sales cost more to get involved and usually costs thousands of rands, again limiting you on the number of people!

Affiliate programs fall under the direct sales company model. You only get paid when someone orders a product. There is nothing wrong with affiliate programs, and they can produce a residual income if it is a service based product.

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Benefits:
1. Your own business
Essentially, every Multi-Level Marketer becomes an entrepreneur and owner of a small business. This is so because each Multi-Level Marketer operates independently from the parent company and only markets the product or service of the parent company. Multi-Level Marketing has also been explained as franchising-in-people.

Many of us are aware of the Spur franchise. The first Spur was started in Cape Town and other people then bought into the franchise and opened up more Spur restaurants. These people, the franchisees, operate their own business but they market and sell the original Spur restaurant’s food and beverages.

Many full-time Multi-Level Marketers even go as far as opening their own offices or building offices at their homes from which they operate their businesses.

2. Virtually no cash needed to start your own business
Unlike traditional ways of setting up a business or the normal franchise route, Multi-Level Marketing offers you the opportunity to start your own business with very low capital outlay. In the case of Multisure the only requirement is that you invest a minimum of R30 to subscribe to one of the products. Passive Incomes is a subscription to the magazine for only R50/month. Thereafter you are free to start recruiting members and earn additional income.

3. Part-time or Full-time
Most Multi-Level Marketers start off part-time and build their businesses and incomes up to a stage where they feel comfortable doing the business full-time with most of them operating from home.

4. Leverage
In a normal/traditional business situation the amount of business a sales person/marketer acquires is determined by the number of customers/clients he or she sees. No matter how motivated and effective that sales person is, he or she can only see a certain maximum number of people in one day.

In MLM every new member becomes not only a member of the income opportunity, also becomes a “franchisee” (let’s call this person A). A will earn commission from all the people whom he/she recruits for as long as they remain members and pay their monthly premiums. However, it does not stop there. All those people recruited by A can (if they so choose) become one of the A’s sales people (let’s call one of them B). B then can become a “franchisee” in his own right and all the people that he/she recruits can become sales people in B’s business. Should B recruit new members then A will also benefit from the work of B and earn a portion of the allocated commission paid out for the work that B has done.

5. A Huge Market
There are a number of Multi-Level Marketing companies operating in South Africa. Multisure is the only one offering legal cover using the Multi-Level Marketing system and Passive Income is the only Network Marketing Magazine. That
means there is no competition for either of the products and a huge untapped market.

6. Unlimited Income Opportunity
Multi-Level Marketing generally offers each one willing to take on the opportunity the chance to earn an unlimited income only determined by the amount of work that they are willing to and actually do put into the business.

7. Low overheads that are tax deductible
The overheads for operating your business and marketing very low. An added benefit is that these expenses are tax deductible.

In Network Marketing you get paid by a company to refer other people to use their products. Most have a compensation plan that lets you earn of referrals from people you referred as well. This then builds up a nice passive income. Network Marketing also gives you the benefits of owning your own business with low overheads and unlimited potential. Even if you run at a loss, you can still benefit Tax wise and claim for expenses you could not previously as just an employee.

So, what is Network Marketing?