| Miller Sales Group |
| "Network Marketing: What You Should Know" By Jeffrey Babener Jeffrey Babener is recognized as the leading legal counsel and an authority for the network marketing industry. He represents many of the industry�s major companies in the U.S. and abroad. Mr. Babener�s law firm is headquartered at 121 S.W. Morrison, Suite 1020, Portland, Oregon, 97204 (503-226-6600). (Copyright Jeffrey A. Babener, reprinted by permission of the author) I. What is Network Marketing? Network marketing, which includes both Multi-Level Marketing and Direct Selling, is a distribution and sales method that adds the power of networking (the sharing of information and resources) to the marketing process. II. Network marketing companies share three basic characteristics: (1) Independent Distributors Replace Middlemen Traditional marketing moves products from the manufacturer to the consumer through a chain of middlemen (jobbers, distributors, wholesalers, retailers, etc.). In network marketing, the chain of middlemen is replaced with a network of independent distributors. The huge profits that normally go to the middlemen are earned instead by these independent distributors. (2) Word-Of-Mouth Marketing Replaces Advertising Network marketing companies tap into the power of word-of-mouth marketing � proven to be the most effective form of advertising in the world. Instead of committing vast sums of money for huge advertising campaigns, network marketing companies pay their distributors for word-of-mouth consumer advocacy. (3) Two Paths to Wealth: Independent distributors in network marketing companies earn money in two basic ways: a. Retailing: They buy products from their companies at wholesale prices, sell them at retail prices, and keep the difference. Or, they simply take orders and receive commissions. This is basically the same compensation offered by conventional marketing companies, except that independent distributors for network marketing companies are not merely employees. Instead, they are their own bosses � the owners of their own business. b. Sponsoring: For sharing the marketing opportunity with other, distributors build their own sales organizations and receive bonuses or override commissions on the sales of the distributors in their organizations. Network marketers can multiply their earning potential by creating their own sales forces and helping the distributors within their networks to do the same. III. A Phenomenon With a Future Network Marketing � widely acknowledged as one of the fastest growing sectors in the business economy � is here to stay, and here to grow. With two active national trade associations, worldwide sales in excess of $70 billion annually, and government recognition, network marketing has become a solid, "mainstream" industry. IV. The Corporate Connection Corporations have discovered the benefits of network marketing � companies such as Avon, the world�s largest cosmetic company, Primerica, the largest seller of individual life insurance, Colgate-Palmolive, the Gillette Company, US Sprint, and MCI, to name a few. V. Marks From Consumers Network marketing brings products and services that are often unique and superior to the consumer�s home. People welcome the convenience of time-saving at-home shopping. They also appreciate the personal demonstrations and explanations provided by independent distributors. VI. An Entrepreneur�s Dream For individuals who want to be a part of the entrepreneurial revolution, network marketing offers an accessible, extremely low-cost business opportunity. When combined with the personal benefits of self-employment, powerful earning potential, tax advantages, and the freedom of a network marketing lifestyle, many individuals find that this is an excellent business opportunity. VII. Network Marketing � A unique Business Opportunity (1) Low-Cost Business Start-Up: minimal initial investment and overhead costs. (2) Choice of Part-Time or Full-Time Career: part-time supplemental income or limitless career earnings. (3) High Income Potential: without years of experience or a college degree. (4) Independence With Full Network Support: a broad range of support and services from the company and the distributor�s sponsor to help achieve independent success. (5) Enhanced Lifestyle: opportunities to expand social opportunities and enhance self esteem. (6) Tax Benefits: perhaps one of the last true bastions of tax relief. (7) The Security of Self-Reliance: as his or her own boss, a network marketing distributor is not vulnerable to being laid-off, fired, or held back by lack of opportunity. |
| VIII. The Limitless Rewards of Network Marketing The key to financial success in network marketing revolves around two powerful principles: residual income and geometric growth. (1) Residual Income Network Marketing gives independent distributors the chance to create a personal asset that will continue to produce a substantial residual monthly income for extended periods of time � perhaps for the rest of their lives. (2) Geometric Growth Distributors can leverage their energy and efforts through a small number of people that they train and manage to in turn train and manage their own people to do the same thing with their own people, and so on. In this way, their network organizations, and their bonuses and override commissions, grow geometrically. IX. Is Network Marketing For You? Ultimately, this is a question only you can answer. Like any other worthwhile endeavor, it takes work and effort to be successful in network marketing. But the unique advantages offered by this growing industry have made it a window of opportunity for hundreds of thousands of people in the United States alone. If you decide to take the challenge, be sure to choose an established, legitimate company with excellent products and services, and a sponsor that will help you become a success. Then it�s up to you � the future is yours to create. X. Choosing The Right Company Which Network Marketing company should a potential Network Marketing distributor join? While there is no precise formula for selecting a company, there are three simple principles that can serve as guides: (1) Product Selection Potential distributors should choose companies with products they personally value. Because network marketing is word-of-mouth marketing, it�s important that distributors be genuinely enthusiastic about the products or services they will share with others. (2) Sponsor Selection It is essential that distributors find sponsors who are committed to their success. Sponsors should provide a new distributor�s initial training, and give support and assistance on a continuing basis. A prospective distributor should join a company only if he or she can find someone in it who will not only be a sponsor, but a partner in success as well. (3) Company Selection The potential distributor should select an established, legitimate company. Regardless of the company�s age, it should follow the guidelines that define a legitimate, mainstream network marketing enterprise: a. The products and/or services offered are high quality, fairly and competitively priced, in strong demand, and backed by a customer satisfaction guarantee. b. No investment is required from distributors except for the purchase of a sales kit or demonstration materials sold at cost. c. There is no minimum purchase or inventory requirement to become a distributor. d. Commissions are paid only on actual products or services sold through distributors to the ultimate consumers. No commissions are paid for the mere act of sponsoring. e. A buy-back policy exists; that is, the company will buy back inventory and sales kit materials in resalable condition from distributors who cancel their participation in the company. f. There is an emphasis on actual retail sales to end consumers. g. Distributors are required to actively develop and manage their own networks. h. The company scrupulously avoids making any claims regarding a distributor�s income potential, other than demonstrations of verifiable income levels for common achievement levels. XI. The Entrepreneurial Revolution An "entrepreneurial revolution" is sweeping America, generating new and unique opportunities in every area of our lives. Innovative alternatives to traditional businesses are rapidly changing the way we buy, sell, and earn our livings. The factory worker and corporate "robot" of yesterday�s Industrial Age has become the entrepreneur of today�s service-oriented Information Age. Today�s workers are moving from the sprawling factory and the corporate monolith to small business and home-based work environments. The entrepreneurial revolution is changing the face of American commerce. And within this revolution, a sweeping movement has come to the forefront � a movement that has captured the interest and spending dollars of entrepreneurs and consumers throughout the world: network marketing. Copyright � 1992 by Jeffrey A. Babener, Legaline Publications |