Network marketing is the wave of future. People are interested in it, because it allows individuals to come together for a common cause. This enables them to get the attention of manufacturer, an organisation, or a service group. With this clout they can meet their individual goals.
- John sestina, certified financial planner
BACKGROUND AND HISTORY
It evolves over a number of years prior to world war II .
the first direct sales organisation to develop this principle was most likely
the one developed by William Casselberry and Lee Mytinger. They had been
selling products sof the California vitamin company ,’ NUTRILITE’. The company
prospered until late 1950’s, when it began to suffer from a number of management
problems. These had harmful effects on business of all their distributors.
In 1959 , two men split from company along with their group
of distributors and planned the birth of a new company.they began to manufacture their own goods and intended to give their people the security and
profits that had been hoped for with nutrilite.
They called their company "AMWAY". Simultaneously , another ex-nutrilite
distributor also made provision to build a new and secure MLM company ,
Shaklee. Ironically after several years the nutrilite was bought over by amway
corporation.
WHAT IS NETWORK MARKETING?
“The movement of products and services directly from the
manufacturer to the end user, who hears about the products or services via word
of mouth”
MLM companies also have their advertising and sales and
marketing budgets as well. The difference is that instead of paying millions of
rupees in traditional way , they pay money in form of incentives and bonuses to
their distributors.
This can also be called as ‘relationship marketing’, in
which you are paid on basis of following principles-
1) RESIDUAL INCOME
It is the recurring income that keeps coming to you long after the work
you have done to produce it has ended. Its like you are building a pipeline of
income and after that money keeps flowing from it. For instance, Michael Jackson
is dead but till today if any of its record is sold payment gets made on his
name to his family.
2) LEVERAGE
“Doing more with less efforts”
No matter how talented you are how much you get paid per hour, if you don’t
take advantage of leverage , you are limited and controlled by number of hours
in a day. By learning to leverage your time, you can also benefit from a
percentage of other people’s efforts and dramatically increase your income and
freedom.
3) Geometric growth/multiplication
“ If you start with one paisa , and double it every day for 30 days, how
much will you have at the end ,of 30 days”
It
will b Rs. 58,68,709.12 to be exact.
With right business opportunity and these enlightened
principles, even an average person can achieve their dreams and an above
average person beyond their expectations.
NETWORK MARKETING VS PYRAMID SCHEME
Network marketing
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Pyramid selling
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1) Primary income is earned from retailing of products.no
income only for recruiting.
2) Anyone can earn big money. Income is based on personal
achievement, not position in organization. Business opportunities improves
with time and exposure.
3) Legitimate product or service is being sold because repeat sale is the key to success.
4) Appeal is to nobler attributes i.e; sharing and helping
others to succeed. Top achievers typically help others and rewards follow
naturally.
5) Legitimate opportunities may be taken up with minimal
start-up costs and little or no inventory investment.
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1) Primary income earned from recruiting. Income from retailing
is incidental.
2) People at top make the real money, until a day comes when
pyramid collapses. Everyone who joins has less opportunity than person who
recruited them.
3) No legitimate product or service is sold.
4) Main appeal is to selfishness, greed , envy and laziness.
5) They often requires high entry fees.
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