network marketing

Network marketing is an amazing business that is truly the last bastion in the free enterprise system. If you know how to harness the power of network marketing, you can grow a very successful business over time. Network marketing is the great equalizer. Anyone, irrespective of their background, education, pedigree, or gender can become a successful business owner with a fraction of the investment needed for a franchise or traditional business.

If done right, the benefits are extraordinary: significant income potential, the opportunity to be your own boss, more time to pursue your dreams, travel the world, and the chance to help others while you are building your own success.

Terms such as Network Marketing, MLM, and Multi-Level Marketing all refer to the same type of business model, within the umbrella of the direct selling industry. This industry has suffered more than its fair share of reputational issues with accusations of being a scam, pyramid, and financial fraud.

Unfortunately, the principles of network marketing are not well understood by many of the people that get into this business. And that’s just one of many reasons why so many fail at network marketing and then blame the business model for their failure. 

Unlike a conventional business, network marketing takes advantage of three important, but misunderstood principles:

  • Leverage (of Time and Money)
  • Residual Income
  • Geometric Growth Through Duplication

If you are considering a career in network marketing, you need to first understand these underlying principles.

Leverage

Every successful person or business takes advantage of leverage. There are only 24 hours in a day and no matter how talented you are or how much you get paid per hour, if you don’t take advantage of leverage you’re limited by the number of hours in a day. By learning to leverage your time, you can benefit from a percentage of other people’s efforts, and dramatically increase your income while creating more free time for yourself.

A common accusation from the naysayers is that only people at the top make any money. That is true in a pyramid scheme. However, in network marketing, the people at the top have a vested interest in helping others on their team succeed because that is the only way they can succeed.

If you had a choice between receiving 100% of one person’s effort (your own), and 5% of the efforts of 100 people, who are also benefiting in the process, which one would you choose?

Not only is the total result with leverage almost always amplified, your income is not dependent on only one person. Even if something unexpected happens to one or more of the people in your team, it only has a minor effect on the TOTAL production.

Residual Income

Residual income is the recurring income that you continue to receive long after the work you’ve done to produce it has ended. It is a passive income and there are several ways to earn it. A very simple example of residual income is interest earned on money in the bank or on your investments. You continue to receive this income without having to invest any more time to generate this income.

However, many people don’t understand it and there is a misconception that you can earn a residual income without working for it. That is a myth. You have to work hard and smart in order to earn this form of income.

A linear income is directly related to the hours you have worked. If you put in 40 hours a week, you get paid for those 40 hours. No more, no less. If you were given the opportunity to earn an income on a consistent basis in the long term for strategic hard work you put in, in the first few years, does that sound attractive? True long-term wealth is built on residual income.

Residual income is certainly not about “getting rich quickly”. Most people who fail at network marketing either choose the wrong company or just give up too soon and quit because they expect overnight results. 

Geometric Growth (Duplication)

Have you heard the classic “Penny a Day” story? It is the perfect illustration to explain the concept of geometric growth. Let’s say you open a bank account with 1 penny (or in the Indian context, 1 Paisa) and double it every day for the rest of the month. What will you have in your account on day 30?

Well, here you go –

Day 1 – 1 paisa
Day 2 – 2 paisas 
Day 3 – 4 paisas 
Day 7 – 64 paisas 

Day 14 – Rs. 81.92
Day 21 – Rs. 10,485.76
Day 30 – Rs. 5,368,708

Do the math and verify it for yourself. That is the power of geometric growth and duplication.

Duplicating yourself means teaching someone else to do what you do. When the two of you each teach another person, you duplicate it again, only twice. And so on, and so on, and so on!

Therein lies the power of network marketing.

If you understand and combine the strength of these three principles, you have a remarkable system for success that can be done by anyone!

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