I had the opportunity to meet for an hour and a half with one of the top income earners in the network marketing company that I work with and he had a very interesting take on what network marketing is.
He compared network marketing to the franchise model that is used by McDonald’s and similar businesses. The network marketing model can be much more lucrative than the franchise model though.
Let’s look at the franchise model first. McDonald’s is in the business of setting up distribution nodes to move a proprietary product, Big Macs and such in this case. They keep ownership of the node and sell the management of the node to a franchisee who then runs the business to generate a profit. The franchisee makes money by selling the proprietary product and is limited to how much money they can make by how much product they can sell through their franchise.
They can, of course, buy another franchise, but that is just more of the same and still requires their direct involvement.
Network marketing lets you go another step further.
On the first level, you can sign up with a network marketing company just to be a wholesale customer. It is always great to be able to save money by having the ability to buy effective products at wholesale.
The second level of network marketing is similar to the franchise model that I already talked about. You sign up with your network marketing company, sell the proprietary product to customers and keep the retail profit and maybe some additional commission for yourself.
One benefit over the franchise model that we have at this level is that we don’t have to do a lot of the things that a franchise owner has to do. The network marketing company handles product inventory, payment processing, and order fulfillment. All we have to do is find customers, take orders, and maintain that customer relationship.
The third level of network marketing is as a franchisor, or more accurately, a sub-franchisor. Network marketing allows us to essentially be like a mini McDonald’s and “sell” new franchises. That gives us the ability to significantly increase the number of people that we can reach and the amount of money that we can make. Unlike a franchisee buying a new franchise, this doesn’t require our continuous direct involvement beyond getting our new teammates trained and on their way.
I believe that the real power in network marketing is in operating at all three levels at once. We need to be a customer, a user of the product that we promote. That is the absolute best way to learn about the product, and our product story will help us to connect with people at a deeper level. That allows us to be more effective at the next level in selling the product to our customers. Success at that level opens us up to more success at the third level because we now have ability to how new people on our teams how to immediately make money.
Getting involved in network marketing doesn’t cost as much as buying a traditional franchise either.
So there you have it. Welcome to network marketing.
If you would like to learn more about network marketing and consider joining my team, visit me at my network marketing business opportunity website.