Network marketing as a business model has been in existence for a very long time (as early as 1950s).
Some people call this business model MLM, multi-level marketing, referral marketing or pyramid selling.
Network marketing is usually a marketing strategy by which a company engages people in direct selling and recruitment in which the person involve not only earn commission on his actual sales, but also on the sales of others below him (that is, his downlines).
Some people are in recent time coming up with some so called MLM without product, just referrals. Wait a minute! I will tell you something about that soon.
Hundreds of people have made millions of naira from their multi-level marketing business and, you see, millions of people have lost money and time too.
My first exposure to network marketing was in the year 2007/2008 through GNLD and few other MLM companies. I got involved with one or two and got some experiences.
Since 2007 till the time of writing this tutorial I have discovered some truths about network marketing and that is what I am about to share with you.
Let`s go inside…
- Network marketing is a business
Joining an MLM company is not going to make you rich next week. It is just like starting a business of your own. The only advantage you have is that the company you`re joining has created a system that will make YOUR business easier.
Can I think of a single skill you need to succeed in a business that is not needed to make it in the network marketing industry?
I really cannot tell.
The most important business skill is marketing skills. In fact, because marketing and selling skills are the most important in the MLM industry, it is called network marketing.
Other business skills such as communication skill, leadership skill, persistent and hard work are as important in MLM industry as it is in the other businesses you can think of.
I think this is the first thing I need to let you know… MLM is a business and you have to prepare your heart for it as a business of your own.
- Network marketing is not get rich quick
There is this pathetic get-rich-quick mentality in our society. Most people simply want to know about a formula that can make them huge money NOW.
I know the reasons for that and I will tell you.
First, because 99% of us were never trained in the art of money making. By this I mean most people really never knew what and what is required to make money. This is because the science of money is never taught in schools (where most people spend their first 25-30 years). The lie we were told at school was that if we could have good certificate we would get a company to employ us and that is the end of our poverty.
Most people are in the dark until when they finish school and see that there is nothing like good job any longer.
At this point, what can they do? Look for ways to make money… very fast.
Another reason is movie, T.V and Newspaper.
Movies show us how people rise from poverty to prosperity, just by luck. T.V shows us business and riches of people and makes it seems as if they made it cheaply. Newspapers carry rumors about how rich people make a lot of money in a short period of time, but never the hidden secrets behind such wealth.
Every legitimate wealth requires so much of smartness, hard work, business and financial skills. Persistent and patience are both needed too.
Muti-level marketing will not make you rich without work (a lot of work), persistence and commitment.
- Network marketing without products is a fraud
As I am writing this tutorial I’m having some leaflets in the next room to me that are about “network marketing” that a friend told me about some weeks ago.
This so call “network marketing” has no product whatsoever. All you have to do is to introduce people, they too introduce others and you`re being paid commission.
This is a fraud!
Let me explain.
If you`ve ever come across any MLM leaflet, you`ll see the way their chat goes. I join, invite 4 people. 4 people invite 16 people. 16 people invite 64. From 64 to 256 to 1024 to 4096, on and on like that.
What you`ll observe is that, at a time (in a very short period of time) there will be 10 million people as members of that company (especially because there is no product to sell, so it`s easy for people to join)
What happen next? Market saturation and decline, then death.
If there is any MLM that doesn`t have product and you`re invited to be part of it, you`re getting inside fraud… my opinion.
But wait! What if they have product?
- Well, every multi-level marketing company eventually declines in growth and die except…
According to research, from 1956 till date, thousands of network marketing have opened their doors in different part of the world, and to date less than 70 have ever celebrated their 10th anniversary.
Let me tell you why this is so.
We are living in a finite world (that is, we are limited in number) while the network marketing system can only succeed in an infinite world.
Just as explained above, if an MLM company is taken to Nigeria for instance and the first person registers. He would invite 4 people, 4 people would invite 16 people, on and on like that.
Assuming the available market for that company in Nigeria (that is, the total numbers of people who will be willing to be part of that company, since no business can ever be loved by everyone) is 50 million, at a point, there will be 5 million Nigerians as members of that company who must invite 20 million people (5 million multiply by 4). Here, decline has started and the death is near.
Soon there will be 20 million Nigerians who must each invite 4 people. Since the available market is finite (i.e. 50 million), it is impossible for these set of people to make any money from the company they jubilantly joined.
Though the people at the top as at this point must have made a lot of money, they are very few. While the earlier tens of people who joined MLM might make millions, you have to look below the chat to see 20 million people who make nothing (but lost their time and money).
If you`re old enough (I know you are) you may know how GNLD came to Nigeria and other African countries.
Didn`t you see something like this happened?
I will remind you.
There are few people who made money, a lot of money from GNLD. But just look around and see whether there isn`t anyone in your family who lost money in GNLD.
I`m not sure but I want to suppose that there could be more than 15 million Nigerians who joined GNLD but never made a penny.
I don`t have anything against GNLD or any MLM company. I am only explaining something here.
Network marketing works as a system of infinite referral in a finite world. It must one day start to decline and eventually die.
That is the reason why some countries of the world have outlawed network marketing in their territories.
- This is the only way out…
Yes, there are MLM companies that have been operating for many years (Amway since 1959, Melaleuca since 1985, USANA since 1992, Forever Living since 1978, Herbalife since 1980, Newways since 1992, GNLD since 1958), this is not evidence that network marketing is a trusted scheme to invest time and money in.
The only solution to the problem of infinite referral, decline and death of the MLM companies is that, any MLM company you intend to join must reward you for selling their products and for the products your downlines sell and you must be willing to continue selling and inspiring your downlines to sell.
Whenever you see any MLM company which promises that all you have to do to make money is to refer people or which places much commission on referral, you can be sure it`s a matter of time for that company to stop growing and start declining… for the obvious reason… market saturation.
If you are willing to join a network marketing company, make sure its reward system rally round commission from sales of its products and be willing to work hard.
I love you.