How Network Marketing Works

How Network Marketing Works

Every company that comes into existence must answer the same question:

"How do we tell the world about our product or service?"

To solve this problem, many companies turn to traditional marketing through print, radio, TV, online, etc. But other companies see the wisdom in creating an organization built of independent representatives who individually develop a network of customers and other representatives to promote and grow the company the Network Marketing model.

For anyone looking for a home business opportunity, Network Marketing (also known as Multi Level Marketing) can be the ideal answer.

Here's a general overview of how it works:

1. Finding a Network Marketing Company - First, you need to find a company whose product or service is something that you can feel excited and passionate about. A large part of your success with a home business is going to be based on how much genuine connection and enthusiasm you feel about the company you work with. Luckily, there are hundreds of Network Marketing opportunities.
2. Joining a Network Marketing Company - Once you have found a Network Marketing company, you need to join that company. This involves paying a sign up or membership fee. In doing so, you become an independent rep (or agent or distributor) or one of many terms that that company may use to describe the people who are part of their network. Typically, Network Marketing or Multi Level Marketing (MLM) companies have sign-up fees in the range of $50 to $1000. Most have an on-going monthly fee as well ranging typically from $20 to $140. The monthly fees are for things like:
   
   
   • Buying the company's product (sometimes called a monthly 'auto-ship'.
     
   • Maintaining your personal website that is given to you and hosted by the parent company (not all MLM companies do this).

   Please note: In joining with the company, you are not an 'employee' of that company. While the company itself may be an established business with many employees, they are not 'hiring' you. Instead, you are choosing to join the company and become a part of their network of independent marketers. And in fact, you have just started your own home business.

3. Your 'Upline' In Network Marketing, the term 'Upline' is something you will hear many times. To describe an Upline, let's look at how Network Marketing works in general:

   When a network marketing company gets started, there are a few people who start building the team of independent reps (or agents or distributors or whatever the company decides to call them...for the purposes of this article, we will call them 'reps'). These first reps reach out to prospective entrepreneurs and start to bring people into the business to sell the company's product or service. The enticement for someone to join a company as an independent rep comes in the form of the company's Compensation Plan or Comp Plan. The Comp Plan describes how the Reps will be paid. Typically reps are paid in two ways:

   • Bonuses/Commissions from bringing new reps into the business.
     
   • Bonuses/Commissions from the revenue produced through the sales of the company's product or service.

   When a prospective entrepreneur feels a genuine connection with the company's product or service, and if they feel that the Comp Plan is set up to produce lucrative income, they will often decide to join the company.

   When they join (and pay the sign up fees), they get signed up 'underneath' the Rep who introduced them to the company. This creates a tree structure or hierarchy where new people who join a company are placed under people who are already Reps in the company. As the company grows and more Reps sign up, the tree structure grows deeper and wider with more and more people signing on and joining under previously established Reps.

   When you join a Network Marketing company, you are always signing up 'underneath' someone else. Any of the company's Reps in your lineage above you in the tree structure are called your Upline. This includes the person who signed you up directly, and then it includes the person who signed that person up above them, and the person who signed that person up above them, and up and up and up all the way to the top and the very first people who got the company going. There are Network Marketing companies out there with hundreds of thousands of Reps. They can grow to be massive organizations.

4. Your Down-Line After you have joined a Network Marketing or Multi Level Marketing company, you start the process of bringing other Reps into the company under you. This is called building your Down-Line. Remember from our introduction of a company's Comp Plan that part of your income comes from bonuses and commissions paid to you from the sign-up fees of people joining the business underneath you.

   Your mission in building your Down-Line is to make it as big as possible. Your income is directly related to the number of people who sign up into the business underneath you. If you want your home business to produce a big income, then you need to build a big Down-Line. In most Comp Plans, not only do you get paid bonuses from people who you sign up directly, but you also get bonuses on the people who reps deeper down in your Down-Line sign up.

   In addition to sign-up bonuses, you get commissions on the revenue generated through sales of the product or service produced through your Down-Line. As your Down-Line grows, so will the volume of sales. And as the volume of sales and revenue grows, so will your income. There are many people making tens of thousands of dollars and even hundreds of thousands of dollars per month from the commissions and bonuses produced through their Down-Lines. It can take years to build your Down-Line to this level, but it is possible and achievable.

5. Your Success in a Network Marketing Company There are many factors that will influence the success you experience from starting a home business in Network Marketing or Multi Level Marketing (MLM).
   
   • Your Upline: We can't stress enough how important it is that you join into a strong and dynamic Upline. Here are some things that you will need from them:
     
     1. Training It's your Upline who are going to teach you about the business, the company you are joining, and the company's products or services.
        
     2. Motivation and Inspiration - Your Upline is your 'family' in the business. They need to be a major source of inspiration and motivation for you.
        
     3. Marketing the way that you grow your business is by finding other people who want to join the business underneath you. Your Up-Line should be able to provide guidance and tips on how to market yourself to grow your business.
        
     4. Mentoring and Support Your Upline are experienced and have been in the business before you. A successful Upline should be able to give you the mentoring you need to create success for yourself as well.
        
   • Passion About the Business: It's not easy to be successful in a business where you aren't excited about your company's product or service. But you will have an easier time growing towards success if you feel a genuine connection and passion for your company's mission and vision. Any legitimate business takes time and energy. If you are excited and enthusiastic about the time and energy you dedicate to your business, success will come more quickly and easily.
     
   • Determination and Focus: Any legitimate home business opportunity is going to require a significant amount of work and energy. Success will not come overnight. You will need to focus, be patient, and work hard. If you are determined and driven for success, it will likely arrive.
     
   • Sufficient Time and Energy: Again, any legitimate home based business opportunity will not become a success overnight. Working only a few hours a week will not be sufficient to grow your business to the point where it will produce a lucrative income for you. Success will come from an adequate investment of the time and energy.

Many people have proven that Network Marketing can produce a very successful home business with very respectable incomes. But any 'get rich quick' frenzy about Network Marketing is something that you should avoid. Most all legitimate home businesses require work, time, energy, effort, determination, focus, support, excitement & enthusiasm. If you are looking for a home based business opportunity requiring minimal investment and where you can determine your own schedule and vision for growth, then Network Marketing would be a good choice.

Choose a company with a product or service in which you feel a genuine connection and passion, and use the HomeBusinessFrontiers.com Network Marketing directory to help you do the research. We have many great companies listed on our site. Remember, if you want to create a significant income for yourself, you will need work hard and dedicate yourself to achieving success. And success is absolutely attainable in Network Marketing. We wish you all the best luck and a joyous journey on your way there.