Network Marketing Home Based Business

Network Marketing Tools To Help You Make Money Online

It is regrettable that many people won't even consider a network marketing home based business as a viable way to make money online due to negative connotations with mlm (multi-level-marketing) and pyramid schemes.

Fact of the matter is that, as with any other business, it is impossible to generalize. Some network marketing business opportunities are better than others and some are really bad. However, you do find excellent companies that can help you build a great and profitable network marketing home based business.

Finding The Right Network Marketing Home Business

How to distinguish between a genuine network marketing home based business and an illegal pyramid scheme.

I just ran a search on Google for the term "Network Marketing" and got 2,210,000 search results. By the way, without the " " I get a staggering 330,000,000 search results! I cannot help but wonder how many of these web pages actually offer members a genuine way to make money...

A legitimate network marketing home business always has two income streams, namely:

1. Commission from actual sales to new customers.
2. Commission for finding new recruits.

What many mlm companies have done to satisfy the requirement that they should offer a product or service is to simply offer products of a dubious value at inflated prices.

The question you should always ask yourself is:

Would I buy this product or service from this company if they did not offer me an underlying way to make money?

If your answer is "no", walk away. You do not want this type of network marketing home based business.
 
There are many horror stories of people losing large amounts of money in pyramid schemes. People have become more careful in recent years but it may be worth while to briefly touch on this subject.

What many pyramid companies did in the past was to require members to buy a huge inventory at inflated prices or pay a high entrance fee to join the company. Sooner or later this type of scheme has to collapse as it cannot remain viable for an extended period of time. The result is that members get stuck with worthless inventory or are out of pocket thanks to the high entrance fee they paid.

Bottom line, a network marketing home business does not invest in buying merchandise or inventory from a company. If you strongly feel that you have to then at least make sure you are not buying at inflated prices. You should always be able to sell the merchandise for at least what you paid for it should the company you bought it from collapse.

As far as paying an entrance fee is concerned... It is normal for any company, offering you the opportunity of having your own network marketing home based business, to expect you to buy their product or service yourself. Remember the rule of never paying an inflated price.

Paying an entrance fee, monthly membership fee or subscription fee without getting a useful product or service in return should be avoided at all costs.

Network Marketing, whether online network marketing or simply home based network marketing is a logical concept and easy to understand.

The concept of a network marketing home based business is actually very simple and logical. Let's assume you want to start your own home based business making and selling soap. Most people will hopefully agree with you that there is a constant demand for soap. Your soap is special. Not only does it clean well but it also comes in many different fragrances.

Your cost is $ 0.20 and you determine that you can sell it wholesale to stores at $ 0.40 or directly to customers at a retail price of $ 1.00. Selling to stores is difficult. You have a lot of competition and often long waiting periods before you receive payment. Selling directly to customers is ideal but you are only one person. You do not have the time to do direct selling. What is the logical solution? You get people to sell the soap for you!

You start selling some soap yourself in the limited time available to you, starting with your friend next door. She has no problem paying you $ 1.00, loves your product and agrees to support you every month. She would like to help you sell soap as she really believes you have a good product but is reluctant...She will have to sell a whole lot of soap to make it worth her while financially! If only she can get other people to help her...

Establishing a network marketing home based business is the answer. You agree to pay her and anybody she recruits $ 0.10 commission per soap they sell, five levels deep. E.g. She sells to five people, they sell to five other people, etc. It will look like this:

Level 1 - 1 person selling to 5 others = 5
Level 2 - 5 people selling to 5 others = 25
Level 3 - 25 people selling to 5 others = 125
Level 4 - 125 people selling to 5 others = 625
Level 5 - 625 people selling to 5 others = 3125

Total people in her downline: 3905 !

How much money will she make with her network marketing home based business? $ 390 per month (at $ 0.10 per soap).

In the above example, she can make $ 390 profit per month through the power of network marketing by only getting five other people to buy 1 piece of soap from her every month and sell another piece of soap to five other people, etc. She can obviously decide to sell to more than five people and they are under no obligation to make any sales themselves.

By remembering the rules she can do very well:

⇒ She is selling a high quality and useful item that she is using herself.
⇒ She does not sell it for an inflated price.
⇒ People will buy the product even without an underlying opportunity.
⇒ She does not require an "entrance fee".
⇒ She does not require anybody to carry a large inventory.

How much money can you make? Remember, you developed the soap. Very simple. Even after paying your downline five levels deep you will still make a profit of $ 0.30 per soap. Calculation: Your cost is $ 0.20, your product sells for $ 1.00 and you spend $ 0.50 on marketing costs ($ 0.10 x Five Levels). Much better than selling it for $ 0.40 to a store!

Direct Selling = Free Advertising

The biggest advantage? FREE Advertising! What better way to promote a product than through the power of direct selling or word of mouth selling. People are a lot more likely to buy a product if someone that is using it recommends it to them.

Network Marketing Tools

A good network marketing company will offer you all the tools you need to succeed.

We did not cover issues such as support, invoicing and payment in the above example for the simple reason that any good network marketing company will automatically offer you great support (even free training) and will take care of invoicing and the collection of payments.

In fact, most good companies will not actually expect you to sell anything in your network marketing home business but only to promote their product and refer people to them. They will do the selling and you will earn commission on every successful sale.

Note: In the above example I referred to a network marketing home based business with a downline of five levels. This is only an example. There are many different commission payment structures and I won't even attempt to try to cover them all. 

Bottom line, the right network marketing home based business can offer you a great way to make money.