Network Marketing vs Sales - The leveraged Way

Network Marketing vs Sales - The leveraged Way

For those who are not clear about the consequential difference between SALES and Network Marketing, understanding and internalizing these differences are CRITICAL for your success.

Let us start with 2 givens .

Great salespeople can sell 100 units, Good salesmen sell 50 units, Mediocre salesmen sell 25 units (and usually get fired).

98% of the people you know are Mediocre salespeople at best.

So let us see the standard corporate sales approach. Bill’s company sells gidgets for $100 and pays Bill $10 commission for each. The company also incurres another $20 cost in supervising, managing Bill, and market promotion of their products. Therefore they have a $30 total cost of sales per giget.

Everyone uses gigets, so Bill the Great salesmen busting his back can sell 100 gigets a day. He makes $1000 per day, that‘s a very handsome $250,000 income for the year. A merely Good salesman would make half of that ($125,000), and the Mediocre salesman again half of that ($62,500) if he can keep the job.

Working as hard as they can, there is no way for any of them to increase their income.

Network marketing companies have a different approach to marketing and compensation. They figure that since everyone uses gigets, why not let everyone, including that 98% poor salespeople, get their personal use of gigets directly from the company. But how will these potential customers geyt to be awarre of this direct buying opportunity?

The company pays only 5% (half of the salesman’s) commission to those who, as their sideline business, are willing to DIRECTLY spread the good word and sell repeat monthly SUBSCRIPTIONS for their product. In this way the company spends ZERO on supervision and promoting. The saved $25 is distributed between the persons who were INDIRECTLY instrumental (upline) to the initial enrollment of this new customer.

So here is what can happen to Joe, our Mediocre salesperson still on his regular job while working part-time with his Network Marketing company. He enrolls as a customer, buys his monthly consumed gigets not from a store but from this company. Then if he chooses, he shares the benefits of the product and enrolls 3 new Mediocre salespeople friends ...who enroll 3 mediocre sales people friends ...who enroll 3 mediocre salespeople. Let’s just stop there for the moment.

Joe now has an organization of 39 mediocre salespeople customers. The company sold $4000 in product. The $1,200 that the big corp would have spent on selling is distributed in this manner

 $200 in DIRECT sales commissions per month to this group

$1000 in INDIRECT commission to the upline.

“I would rather make 1 percent of 100 people's efforts then 100 percent of my own.” — J Paul Getty, in his time the richest man in the world.

Unlike Bill, Joe has LEVERAGED his time. He is deriving a small amount from the efforts of every ordinary person in his Network. And the size of that Network has NO LIMIT. His income from his network becomes almost passive and potentially ever growing.

So how did Joe do on his ONE TIME effort of enrolling 3 people? Every month he receives $15 in Direct commission and perhaps another $200 (5%) INDIRECT Commission for his effort. That’s almost $1400 for the year.

So now Joe can promote gigets not only for the product’s quality but he has a SECOND motivating factor: REAL MONEY!

Infact, as we look at Joe’s income stream, far more money is derived from his INDIRECT stream (Building his Network) than from his DIRECTstream (personal selling of product). He is heavily INCENTIVISED to build a network. Understanding this incentive, SOME (many) mediocre sales people put their back into encouraging their customers to enroll 3 customers each, and therefore begin to EXPLODE the size of their customer network, and consequently the size of their total group sales. The Company thrives and Joe thrives.

But WAIT! Once he gets going, unlike Bill, Joe’s income can keep GROWING with relatively little effort by Joe. If there is great DUPL:OCATION in his organization, the growth is virtually UNSTOPABLE.

 And all it takes is 3 x 3 x 3. it's not even that difficult to accomplish if you consider the power of 3 x 3 x 3 x 3 x 3 etc.:

New                Total

Customers    Customers

3                       3

9                      12

27                   39

81                  120

243               363

729               1092

And it keeps growing on much much larger.

NOTE: The above is the perfect mathematical model, and real-life never works out perfectly. Not everyone does their 3, and attrition takes its toll. On the other hand, some produce a lot more than 3 to advance their business.

These are people. But what does it mean in DOLLARS? Just as an example, in my company a network of 1000 customers would earn Joe $20,000 per month, about the same income as Bill, the Brilliant Salesperson makes. Pretty good for Joe, who is just a Mediocre Sales Person. (amd most people in my company who got there did it part time)

But WAIT. Bill is stuck at his income level working as hard as he can, while Joe’s business keeps growing because many customers want THEIR own network to earn a few bucks. And some begin to focus on helping their network grow even faster, so Joe's network keeps on growing without Joe's personal effort.

 Unlike Bill’s job, there is no limit in potential earnings. In fact, several thousand Superstar Network Marketers earn into the 7 and even 8 figure realm in this industry ...and they all started out as MEDIOCRE SALESPEOPLE. The truth is that Network Marketing has created more millionaires than any other industry. That’s the power of Leveraged Income.

One more difference: Bill’s commission income declines when ever he takes a vacation or gets ill. Joe’s income is NOT dependenty on his personal time spent on his business. Time off may mean less growth, but not significant lost income.

As one of my consistent 6 figure producing friend tells: “I get up when I am tired of sleeping.” He was a telephone company lineman living in a walkup studio when I first met him.

And now the PUNCHLINE: DUPLICATION.

It just takes 3 customers getting 3 customers. Plus a lots of DUPLICATION of simple process that every Mediocre Salesperson can follow.

The key to successful Network Marketing is NOT salesmanship, but DUPLICATION. 

Most people think that carefully choosing their favorite product to take to market makes it easier to succeed. I strongly disagree.

The reality is that possibly the most important decision you may EVER make is to choose a company and/or UPLINE team that offers the most EASILY DUPLICATABLE enrolling process. With that in your toolbox, it becomes simply an issue of WORK EFFORT to succeed …...almost regardless of product. Without it you are spinning your wheels.

If you enroll using a complicated, sophisticated process, if you are a Brilliant Enroller, then your downline can NOT replicate your level of competence, and they will FAIL. YOU have set them up for this failure. This is what  gives Network Marketing a bad name. Please STOP it.

Remember that 98% of the world consists of Mediocre Salespeople and they NEED a SIMPLE DUPLICATABLE recruiting system that they can follow and teach. Be sure you give it to them

If YOU use a SIMPLE DUPLICATABLE process, your 98% new Mediocre Salespeople will replicate that process, use that process, and teach that process, thus permeating it deep into their successful network, so that ANYONE can succeed. 

Please understand the KEY difference between SELLING and SUCCESSFUL Network Marketing:

The few Brilliant Salespeople can sell a lot of products, while ANYONE using a Simple highly Duplicatable enrollment system can create permanent income by building a successful MLM & Network Marketing business.

Steven S.