Women leading women

Network Marketing – Friend or foe

When I left school – longer ago than I care to remember – I took my career advisor’s advice, pleased my parents and trained as a State Registered Nurse. I started to work my way up a career path which, at that stage, looked promising, safe and secure.

Some 30+ years later, disillusioned by ever-increasing imposed change and the fact that I was no longer able to do what I had first entered my profession to do, I came to the decision that there had to be a better and less stressful way of working.

Seven years ago I was introduced, by retired veterinary surgeon Peter Kemble, to the concept of Network Marketing (NM). Initially very sceptical and suspicious, but impressed by the professionalism and honesty of Peter, I decided to investigate further.

I discovered that Network Marketing (aka Multi Level Marketing, Team Marketing or Referral Marketing) is the fastest growing method of product distribution in the world today. It is closely linked to the Direct Selling industry where, in the UK, sales have doubled in the last 10 years leading to a £2 billion turnover. This business is achieved by 130 substantial companies like Virgin, Gillette, Nestle, Unilever and Penguin Books plus several hundred much smaller micro business enterprises.

Network Marketing turns over $100 billion worldwide involving 50 million Distributors. In the UK in 2002 it turned over £400 million. This is a huge business – but with a small twist. Unlike traditional business where a few people work their socks off – Network Marketing is all about lots of people each doing a little.

John Paul Getty said that he would prefer to earn a small amount of money from a large number of people than a large amount of money from a small number of people. Network Marketing operates through developing networks of ordinary people who work together as a team to achieve extra-ordinary outcomes and incomes.

Network Marketing offers a realistic, part-time, low-cost means of running your own business initially alongside a current job – so no leap of financial faith is required. It can then be developed, at whatever pace an individual chooses, into a full-time, lucrative career.

Some people still confuse Network Marketing with the outlawed Pyramid Selling scams which saw large amounts of money invested in unsaleable stock. Pyramid schemes are often without a product or service, and the incomes are largely created by introducing other people into the scheme. Money can also be generated through the inflation of the product price as it changes hands. This is NOT Network Marketing.

Today’s Network Marketing is regulated by law and by trade organisations such as the Direct Selling Association, the Office of Fair Trading (OFT) and the Department of Trade and Industry (DTI) which lay down strict ethical standards.

There are many Network Marketing companies offering different products and services including health and nutrition, cleaning products, children’s books and toys, dieting products and telecommunications. As this is a business, not a home-working JOB, you will need to invest in your Business Starter Kit – basically a product inventory and essential paperwork i.e. everything you need to get you off the ground. The Direct Selling Association specifies that this cost should be no more than £200 – emphasising that we are not looking for major financial investors!

Once registered with a NM company, there are several ways to develop an income. Firstly, as a Distributor you are able to access the company’s products at a discounted rate – this rate varies from company to company and increases as you move through your company’s marketing plan. You can then develop a customer base (usually quite small – I have 20 – 30 regular customers), look after them well and benefit from an extra £50 – £200 per month – usually achieved in approximately 5-10 hours a week. This level is the nearest comparison to having a paid job or a traditional business because, if you stop servicing these customers and they go elsewhere, your income will cease. But it is also a very important level as any company will only be successful if product is moving to the customer.

The second way to develop an income is to extend the first level by introducing or sponsoring other people whom you help establish their own customer base. The company will then pay you an over-ride based upon the turnover of these
small businesses – whilst ensuring that you do not earn more money from their businesses than they do. This can increase your income from around £200 – £2,000 per month – usually still very part-time alongside a current job or career.

From these people, leaders will emerge – Distributors who wish to create a royalty-style income – the third income stream option. With help and support from yourself and the company, some people will establish a substantial free-standing business – like a little franchise of your own business, but without the financial outlay or need to pay the sponsor a percentage of turnover. It’s the company that pays the sponsor this percentage as a training bonus for the time invested in supporting that business. This is essentially a pension-style income which will be paid month after month, year after year for as long as that business exists. But, unlike a pension, it is non-contributory, index-linked and inflation proof. In my company this income is also willable to your family, friends or favourite charity.

Some companies also have ‘extras’ such as earned incentive schemes/car plan, free travel options and profit-share schemes.

There are many benefits to developing your own NM business – here are just a few:

  • Work from home – overheads are minimal
  • No product development or research costs
  • Usually superior products than found in the high street
  • People to ‘hold your hand’ and help you get established
  • Company trainings plus books, DVDs, web sites etc to tap in to – my company has the Investor in People accolade due to it’s superb corporate training programme
  • No previous experience or qualifications required – a complete level playing field
  • You choose the income you want – if you want more, you work more
  • You select your hours to ‘cling film’ around other commitments
  • Low start-up cost (max £200) – try starting a window cleaning round for that
  • Real tax advantages

To give a balanced view – these are the challenges I have encountered:

  • It’s hard work – not in terms of long hours, as you select the hours you want – but this is a business like any other, not a get-rich-quick scheme and it takes time, effort and commitment. There may be little financial gain in the first few months but most people vastly underestimate what they can achieve in a 3-5 year period
  • There is usually a steep learning curve as, unlike attending college prior to working, you earn as you learn. But there is usually someone (your sponsor or upline) to work with you to identify what you need to know first, second and so on – so you do need to be coachable and attend some trainings
  • You will need powerful self-motivation. You are the boss and you alone decide when (and whether) you are going to work. Persistence and consistency are key to success.

If, having read this article, you feel encouraged to pursue NM further – a few words of advice:

Find a company that;

  • Is more than 5 years old – 95% of NM companies do not survive into their 5th year
  • Is registered with the DSA (Direct Selling Association) – and approved by the DTI and OFT
  • Has a product or service with which you can become at least enthusiastic, if not passionate, about
  • Has consumable products – repeat sales are so much easier than finding new customers

Then look to your self:

If you are committed to your own success – and the success of others, not afraid of hard work and have unfulfilled goals and ambitions in life – then I really encourage you to consider Network Marketing as an exciting and accessible option – GOOD LUCK!

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About the Author: Lottie Dale is an Independent Distributor with Forever Living Products.  You can find out more at www.icanifiwantto.com

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