Why Network Marketing

In April of 1979, I viewed my first network marketing presentation and fell in love with the concept. At that time, I was a corporate manager for a Fortune 100 company. I had graduated from college with a business degree and set out to climb the corporate ladder to success. However, those circles drawn on a white board opened my eyes to the future of business.

Thirty two years later, I am convinced that network marketing is the wave of the future in business. It is a powerful marketing model that is sweeping through the world and will have a greater impact than franchising. Bold statements? The balance of this article will provide the proof.

Fortune magazine called direct selling (of which network marketing is the largest segment) “the best kept secret in the business world.” It has experienced 91% growth in the last 10 years with annual sales in excess of $40 billion in the U.S. and $150 billion worldwide. Financial experts say that it’s a “recession proof” industry. Billionaire Warren Buffet, after purchasing a network marketing company, called it the best investment he’d ever made. Tom Peters, author of In Search of Excellence, calls it the first truly revolutionary shift in marketing in the last 50 years. Rich Dad, Poor Dad author, Robert Kiyosaki was so impressed with the industry, he called it the Business of the 21st Century and wrote a book by that title.

Even billionaires and Fortune 500 companies are jumping on board the network marketing bandwagon. Richard Branson, founder of Virgin Records, launched his own network marketing company in the U.K. Warren Buffett has purchased two network marketing companies. Donald Trump has been associated with a couple of network marketing businesses. Time Warner, Lillian Vernon, City Group, Hallmark Cards, Nestle, Jockey, Readers Digest, and Remington have either purchased or launched their own entries into this high growth industry.

Why the interest in network marketing? The main reason is that it fits the current marketing trends. If you haven’t figured it out by now, the baby boomers (those born between 1946 and 1964) are in control. Seventy six million strong in the U.S. and over a billion worldwide, the boomers have dictated what is hot, from baby food and diapers to fast food to minivans and SUVs. Now the boomers are looking for products that will help them look and feel younger and ways to secure their financial future and enjoy more time freedom. Network marketing offers the answers.

Tired of the corporate rat race, boomers are starting home businesses in record numbers. CNN reported that a new home based business is started in the United States every eleven seconds. The home business boom is the next big trend and network marketing is one of the hottest home businesses available. It offers low start-up investment and monthly overhead. Entrepreneurs can start part-time, while still employed, and build the business to replace their job income. Age, gender, and race aren’t barriers in network marketing. In fact, well over half of the success stories are women.

The biggest reasons that the boomers are flocking to network marketing are time leverage, residual income, and tax benefits. Network marketing is one of the few businesses that does not require employees and yet enables the owner to leverage his or her time by building a network of independent business people. This network, which purchases and sells products or services, generates a residual income for the owner. Unlike the income earned at a job, which stops when the work stops, residual income continues on long after the work is completed. As exciting as leverage and residual income are, boomers love the tax benefits of network marketing. Tax expert Sanford Botkin says that a network marketing home business can result in tax savings of $3,000 to $9,000 per year.

The final reason why so many people of all ages are interested in network marketing is the internet. Success requires a business owner to build a large network of people who buy and sell products/services and recruit others who will do the same. The internet now enables network marketers to build national and international businesses from the comfort of their home. No more early morning alarms and high stress commutes. All the work can be done from a bedroom with a computer and telephone.

Network marketing is the first true equal opportunity, as there are success stories from every age and ethnic group, gender, personality type, education level, and walk of life. However, this is not a get rich quick scheme where supposedly everyone will succeed. This is a business that requires financial and time commitment and the willingness to work hard until success arrives. The great part is that network marketing, similar to franchising, is a turn-key business. Others have forged the trail and all a person has to do is use the proven systems and follow the path. Don’t expect to make millions the first year or the second, but do expect to make enough to give you time and financial freedom.

The first key to success is to find a company, out of the over 3,000 available, that operates with high integrity and offers a product/service that brings out passion and excitement. The second key is to find the right compensation plan. There are six basic types – Stairstep, Matrix, Unilevel, Binary, Hybrid, and 2 Up. Each has positives and negatives, so study the plans and find the one that fits best. The third key is to study those who have already been successful and duplicate what they have done. Last, never, never, never, never, quit. The success you seek may be just around the next corner.

Network marketing is over 60 years old, so it’s not a new concept. However, it is a concept whose time has come. In the movie The Graduate, a young Dustin Hoffman was told that the future was in plastics. I’m here to tell you that the future is in network marketing and that future is now.