Analyzing the Network Marketing Model - Is It Legit?

Network marketing is a simple business model that has earned a poor reputation in the past decades. The business model is centered around companies allowing independent representatives to re-sell their products, and "hire" more independent representatives to continue the sales. Reps only earn money when they sell a product, or when one of their hired representatives sells a product. No reps is legally an "employee," but instead an independent contractor who works from their home or own office space.



While the industry has seen its share of lawsuits in the past few decades, the history of network marketing is quite innocent.



Early Days of the Network Marketing Model



In the 1860’s, there were approximately 50,000 salesmen in the United States. Companies based out of hubs like New York sent salesmen across the country to sell directly to consumers. Without television or the internet, this was one of the most effective ways to get a "commercial" into the homes of rural America. By 1885, the number of salesmen had grown to 100,000.



Some of America’s most profitable businesses had their start in network marketing. Heinz, the maker of America’s most popular Ketchup, began with a group of 400 salesmen. Coca-Cola, similarly, began when Asa Candler recruited salesmen to sell the secret recipe product to restaurants across the country. Tupperware and Mary Kay are examples from the 1900’s that have led to at-home parties and hugely successful businesses.



The Model: It Works for Those Who Work It



The network marketing model can work for those who are willing to make it work. It’s a tough business, mostly because a lot of rejection is involved. For anyone who has just started as an independent rep, this sentiment resonates. It can be difficult to tap into your market of close family and friends, just to hear the words "no" time and time again.



Network marketers in this century have different obstacles and challenges than salesmen in years past. It’s important to understand how to use the internet to grow your organization, and add people into your downline. It’s also important to perfect a telephone pitch and prepare your communication skills for the requirements of network marketing. There are several technical, web-based elements that reps should know about, like boosting rankings in search engines (known as SEO).



Learning to Make the Network Marketing Model Work for You



Fortunately, these are things that can be taught, and passed along, just as techniques from the 1800’s. Network marketing depends largely on relationships, and learning from experts in the field is a good way to start your business the right way, and sustainably build it to a passive, residual income level.

To find out more about building a network marketing skill-set to launch your business, read more here.

Joshua Fuson is a professional marketer, and has participated in the generation of over $14 million dollars in the direct-marketing industry in the past 4 years alone. To find out more about Josh, and to see how he uses the internet to grow his own business every single day, click here.