How to Explain the Network Marketing Business Model

The network marketing business model is best described as “taking a product or service to market through a network of people.” That’s it. Don’t make it any more complicated than that.

There are multiple ways to take a product to market. Retail stores, catalogue-only stores, on-line only stores, mail order, and direct response TV are examples that most consumers are familiar with. MLM is just another “go-to-market” strategy.

When you explain the network marketing business model, try comparing and contrasting it to these other marketing methods. Often this approach gets people thinking more broadly about how business is transacted. You can point out to them how they have probably (at some point in their life) done business with all these different types of companies. Ask them have you ever bought from:

· QVC or Home Shopping channel? (Direct response TV method)

· Lands End or Sears? (Heavily reliant on catalogue-sales)

· Best Buy or Target? (Retail stores)

· or (Online-only stores)

Explain to the prospect that every company has to decide on one primary way of marketing their products. In addition to the choices above that they are familiar with, they may not know much about the network marketing business model.

The strategy in a MLM business is to have a large sales force comprised of satisfied consumers and not invest heavily in stores, executive salaries or glitzy TV campaigns. Instead of hiring salespeople to sell the product, the company enlists the help of its existing happy customers to help spread the word.

The great thing about the network marketing business model is you can earn a side income or full-time income promoting a product you love. For example, I love my iPad. If I worked at an Apple Store I could look every person that walks in the door, straight in the eye and offer an enthusiastic endorsement of the iPad. It rocks. If Apple gave ordinary people the ability to earn as commissions 10-20% of every iPad sold, think about how many people would participate just to get their own iPad paid for free through referrals?

That is the network marketing business model. You have to love the product and it has to be something you’d use and recommend even if there was no business opportunity. If you find that right product, and there is a network marketing business opportunity attached to it – you’ve found a match.

When you sit down to explain the network marketing business model to a friend, don’t use the iPad as an example. Use something that they have told you is a good product…like a golf club, or a baby stroller or a pair of shoes.Ask them how they first found out about it (TV, radio, print, in-store, a friend) and ask them how they eventually bought it (online, in store, mail order, telephone, from a friend).

Use multiple examples until the prospect realizes that getting referrals from a friend and buying through a friend are just alternate business models. The more you can keep your discussion of the network marketing business model about business in general, the better off you are. You don’t want to allow network marketing to be seen as an inferior and last-resort method of taking a product to market. Quite the contrary, many large companies are now making it the primary method of getting the word out.

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