BELIEF IN NETWORK MARKETING (NWM)

On this page, you will find...

What is Network Marketing?

• "THE flip-flop CEO: It's Time to Get a Life" by Finney, Muirhead & Roberts
• "The Business of the 21st Century" by Robert T.  Kiyosaki
• Is it one of those pyramid things?
• 3 Rules of 3

History of Network Marketing

• Before network marketing
• The pioneers
• Network marketing & the FTC
• How does network marketing work?

The Power of Exponential Growth

Fear of change

People have always been afraid and even ignorant about ideas and methods that may result in change. 

Fear of change caused ridicule of Christopher Columbus, Louis Pasteur, Thomas Edison and Albert Einstein. There are other examples of how fear of change had effects on progress: department stores and franchises.

Department Stores

In the 1800s, people bought what they needed at small, family-owned shops. Then a man named W.T. Grant had an idea that created change: What if we combined all these separate, little shops by making them individual departments under one roof, in one large store? 

Customers loved the new and better way of doing things. However, the individual merchants who owned the old-fashioned retail stores saw their businesses decline. The shopkeepers fought back politically. There were thousands of them with thousands of votes, and they lobbied for their right to do things the same old way.

They finally got the local and state governments to outlaw Grant's department stores. Eventually, Grant's department store won out. If there is a better way it will persist.

Franchising in the early 60s

In the early 1960s franchising was a revolutionary new technology in business, and it was also met with resistance. Newspapers and magazines wrote about what a scam and rip-off franchising was. Stories of people who lost their life savings to some franchise were everywhere.

Franchising came close to being outlawed 

There was a strong move to make franchising illegal. In fact, franchising actually came within 11 votes of being outlawed by Congress. Today this 'so-called scam' is responsible for over 34 percent of all retail sales in North America. Franchises sell nearly 800 billion dollars worth of goods and services today. 

Every industry goes through an evolution 

• Chiropractors were considered quacks in the 1970s
• The stock market was considered shady and a form of gambling
• 1690: The first newspaper in British North America, The Public Occurrence was suppressed by the governor of Massachusetts 

~ by Greg Stewart

The First Network Marketing Company  

Like all-powerful concepts, Network Marketing has also met resistance due to a lack of understanding. There is no mystery to Network Marketing:

• It's just another form of sales and distribution.       

In the early 1940s

A company by the name of California Vitamins recognized that all their new sales representatives coming aboard were friends and family of their existing sales force, primarily because they wanted the product at wholesale cost. 

They also discovered that it was easier to...

• Create a sales force of a lot of people who each sold a small amount of product than it was to find a few superstars who could sell a lot of products.      

• So they combined those two ideas and designed a sales compensation structure that encouraged their salespeople to invite new representatives from satisfied customers

Exponential Growth

Most of these new representatives were family and friends, who each had the same right to offer the product and representative status to others. 

• This allowed the sales force to grow exponentially.

• The company rewarded them for the sales produced by their entire group of sales representatives, their network of sales  

Network Marketing was born!" 

~ Greg Stewart

The Business of the 21st Century

~ By Robert Kiyosaki

“We found that one business model stood out from the rest: 

• It creates passive income 
• Requires relatively little cash investment to start-up 
• Has a very low overhead
• Can be operated on a flexible part-time basis until it generates enough cash flow for the entrepreneur to transition out of his current full-time job. 

That business model is called network marketing.”  

Abuses of exponential growth haunted network marketing for years and it is still misunderstood today.

Chain Letters

One of the first abuses of the concept of exponential growth to generate income may have been the chain letter craze that swept the U.S. after World War I. The letters promised great profit if you would send a dime or a dollar to the person at the bottom. The chain letters spread as far as Europe, and by the 1930s the U.S. post office estimated that 10 million letters were being mailed each day.

Postal Authorities and law enforcement agencies battled the fraudulent schemes and the chain letter phenomenon began to subside in the early 1940s. Unfortunately, this scam spawned schemes that came to be known as pyramids, where money was given for the right to involve others -- no valid product was being purchased from the company.

In 1974, Senator Walter Mondale declared such companies to be the nation's number one consumer fraud. Law enforcement agencies moved quickly to clean up the abuses. In the mid-1970s, with no clear understanding of what constituted a legitimate use of network marketing, the Federal Trade Commission and state agencies across the nation turned their eyes to almost all network marketing companies. 

In 1975, the FTC filed suit against Amway, alleging that the company was an illegal pyramid and that its refusal to sell its products in retail stores constituted a restraint of trade.

Amway spent four years and millions of dollars in legal fees to clear its name. In 1979 the FTC (Federal Trade Commission) ruled that Amway was not a pyramid and that its revenue was generated from the sale of its products. The FTC acknowledged network marketing as a legal and efficient distribution system.

Network Marketing exploded in the next decade.

~ Greg Stewart

 NWM is the new way to financial freedom.    

You'll never create residual income and freedom from the traditional job. Even professionals are trading their time for money; if they are not seeing clients or patients, they are not getting paid. Most income is temporary and it is easy to determine if your income is temporary - just stop working for 90 days. If your income stops or slows down, you have temporary income.   

In NWM, you can stop trading time for money. Once you develop a solid network of sales representatives, you will create ongoing residual income. This can give you the freedom to do what you want when you want to.  

In NWM, you share information and develop personal and professional contacts. You are rewarded for sharing information that results in product sales.  NWM empowers you to build your own networking sales organization from your personal and professional contacts, which also empowers everyone to do the same, creating exponential growth of your network.  You can earn income from the successful efforts of your network of business associates. 

Unlike conventional corporations with one chief executive at the top, in Network Marketing everyone is the CEO of his or her own independent organization. 

A NWM company supplies the product. Then they join in partnership with a network of independent representatives, each one in business for themselves.  

The NWM company takes care of the following: 

• Website design & implementation (since 2000)
• Research and development
• Finances, marketing materials, management, public relations
• Production, warehousing, packaging
• Quality control, administration, shipping, data processing
• Accounting, payment of representative sales commissions, conventions and more.

~ Greg Stewart

Let's look at the second column...

• See what happens when you sponsor three people, and you teach these three to sponsor three, making nine more 
• Then you teach your three people how to teach those nine to sponsor and now you have 27. 
• Going on down one more level, you will have 81. 

Notice the difference between 16 and 81!

• The real difference is that you sponsored just one more...

~From The 45-Second Napkin Presentation, by Don & Nancy Failla

Now look at the 3rd column...

• You sponsor 4 and teach them to sponsor 4
• Then you help your four to teach the 16 they have to sponsor four, adding 64 to your group
• Working down only one more level, and before you know it, your group has 256 more

Now that’s getting to be a considerable difference right there, 

• ...but the REAL DIFFERENCE is that everybody only sponsored TWO MORE!”

~From The 45-Second Napkin Presentation, by Don & Nancy Failla