Many people in Australia have negative perceptions of network marketing. Some pre-judge without knowing exactly what network marketing is, others may have had a bad experience with a unethical company in the past .
To understand what network marketing is, you first have to understand what it isn’t. Network marketing most definitely is NOT a pyramid scheme. Pyramid schemes are illegal, don’t have a real product that has a commercial value and are purely about recruiting others.
Network marketing is a legitimate business model and involves a company selling their products through a network of independent distributors rather than using wholesalers and retail stores. A successful network marketing company needs to have high quality products that are in demand and sell them at a fair price – these rules are no different to a traditional business.
Unfortunately there have been some unethical network marketing companies that have damaged the reputation of the industry. These companies focus almost entirely on recruitment over and above selling the products, which are often over-priced and poor quality.
Most network marketing companies however are ethical and socially responsible. These organisations have reasonable priced, superior quality products and a fair compensation plan that rewards distributors for selling the products as well as building their team by introducing new distributors to the company. Some of the largest and most recognised names use network marketing to sell their products – companies like Amyway, Tupperware and Avon.
The Business of the 21st Century
Robert Kiyosaki, author of Rich Dad Poor Dad – the #1 personal finance book of all time has recently written a new book which recommends network marketing as the business of the 21st century. For several years, multimillionaire businessman, entrepreneur, and investor Robert Kiyosaki has been a staunch supporter of network marketing (as have other successful business people such as Donald Trump and Warren Buffet). Like many people, he was skeptical about the industry at first … until he learned firsthand what network marketing is all about: helping people
Network Marketing Myths
Below are some common myths about network marketing….
No 1: The only people that make money are those at the top
This would be true if it was a pyramid, but network marketing isnt. There are many people who join network marketing companies years after they were established and go on to earn seven figure incomes.
No 2: Most people in network marketing don’t make money
Many people a particular network marketing company simply to get the products at wholesale prices and have no intention of building a business, others just enjoy using the product and share it with their friends to earn enough to pay for their products every month. For those that do go on to build a business and distribute the products, the success rates are higher than for a traditional business and there are more six and seven figure earners in network marketing than any other industry.
Its a well-known fact that the majority of small businesses fail in their first year and even more in the first 3 years. Like any business, unless you invest time and energy in to building your network marketing business it will fail. It is not a get rich quick scheme.
Many people of are the opinion that unless you are at the top of the company you won’t make money, that is not entirely true.
Myth No 3: You have to ‘hound’ your friends and family to make money
Many people have built successful network marketing businesses by using their ‘warm’ market. Many people who go on to build a large business started by using the product, it worked for them so they shared it with friends and they accidentally started building a business. There are opportunities to distribute through your warm market which is not just about family and friends, but also anyone you currently do business with, groups you are involved with etc.
However approaching people you know is not necessary and you can use traditional advertising, meetings, networking events, online promotion and other marketing activities to distribute the products and the business opportunity.
How to find an ethical network marketing company
Don’t just jump in to the first opportunity you hear about, even if someone you know claims it is the best company do your own research.
- The first thing to check is that the company is a member of the Direct Selling Association of Australia (DSA). The DSA have a strict code of conduct and a rigorous selection criteria that ensures all companies in the association are ethical, responsible and legitimate.
- The 2nd thing to do is to look at the products and ideally try them yourself. Do the products work, are they reasonably priced, is the company making unrealistic or even illegal claims?
- The 3rd thing to do is to look at the company. Find out how long they have been established, are they growing, how many distributors there are in Australia and worldwide, is the company led by an experienced management team, is the company respected within the industry?
- The 4th thing to do is to look at their compensation plan. Is the plan fair, are you able to make money without needing to recruit lots of people, can you sell the products at retail prices, how much do you need to spend every month on the companies products, what is the start-up cost
- Only when you have done your research should you make the decision to get involved.
Your comments
Have you been involved in network marketing before? what were your experiences? Are you currently building a network marketing business? Share your experiences below…
About Tom White
