There are four simple aspects of a Network Marketing business that make it work and make it very valuable. We call them Cornerstones. Understand them. Believe in them. Show them powerfully to others. Then you will be in a position to build your very own empire.
- The People
- The Sales
- The Money
- The Asset
Cornerstone 1: The People
Network Marketing is a lot of people doing a little bit each, as opposed to a traditional direct sales business model where a few people do a lot. In direct sales, $1 million in sales might be achieved with 100 superstar sales reps, each with a $10,000 quota. In Network Marketing, you swap the numbers: 10,000 "anybody" volunteers each doing an average of $100 in sales. So how does one get 10,000 people, or even 1,000?
Two laws allow us to gather 1,000 people. The first was written by the creators for the Network Marketing concept who said, in essence: “Anyone can, and should sponsor others.” This allows the second law: Geometric Progression. We know this math as two who get two equals four, who get two equals eight, who get two equals16, and so on. This is a geometric progression – a penny doubled every day for a month equals over $5 million. The one variable in effectively applying a geometric progression is one’s belief.
This progression can quickly be overwhelming. But your role in Network Marketing is just to get the first two of four – not the whole bunch. Focus your attention (and your prospects’ attention) on just the first four. The question could be asked: “Could you get four people somewhere in the world to do this?” Most people would answer “yes”. Lock in on that yes, it will generate belief in the geometric progression. The essence of this model is that each person is only responsible for seeing and believing they can get four. Anyone can see themselves doing that.
Cornerstone 2: The Sales
Most people looking at an opportunity that involves a product or service and making money think they have to sell a lot of stuff. Most prospects do not see themselves selling a lot of stuff. It is important that they see the difference between direct sales and Network Marketing. The sales are simply created by the Distributors using and offering products. Distributors merely shifting where they buy from (redirected spending) creates a lot of Network Marketing sales. We now buy here, instead of there.
Now consider the customers. The question to ask is: “How many customer families like yours do you need to meet your Network Marketing sales quota?” Most Network Marketing opportunities have a monthly sales target of $50 to $100. So if you are using $50 a month, how many customers just like you do you need to hit a target of $100? Yes, the answer is one.
Cornerstone 3: The Money
This is the easiest cornerstone to understand and believe. Every Network Marketing company has a compensation plan that pays you on most, if not all, of the many levels of people in your group as a result of you sponsoring your first, second, third and fourth levels. These plans vary; on an average they will pay you between 3 and 10% on everyone in your business. You can simply add up all the people times all the sales and multiply the total by the average payout of your plan. This gives you the money.
Cornerstone 4: The Asset
This is often the most overlooked value of building a Network Marketing business. Yes, you can earn a great part-time income in Network Marketing. The real value of an effectively built Network Marketing business is the residual nature of the income, meaning it should continue to flow long after you do anything in particular to make it flow. An organization built the right way in the right company should last a lifetime, and beyond.
Here are some requirements to building your empire the right way and in the right company:
- You will need to believe in yourself and your value to others.
- You and your people will need to respect, admire and trust the company.
- The products/services need to be high quality, high value, and in demand.
- The company must stay in business for as long as you want the money to flow.
- You will need to be a leader by profession, as will many of the people in your group.
- You will need to believe in, respect and admire the Network Marketing wealth-building model.
- High quality relationships must be built. You with your frontline four; them with their four, and so on.
Build your network right and its sales and your income should flow long after you have anything to do with actively managing or growing it. That does not mean you ignore it or fail to nurture it. When we build or buy something that produces income without working it daily, it becomes an asset worth money in proportion to the income it produces. Income-producing assets are generally worth 10 to 20 times the annual income they produce. For example, if you own a rental home that pays you $1,000 a month in rent, it is worth $100,000 to $200,000. Or if you had $200,000 in stocks, bonds, etc., you would earn $10,000 to $20,000 a year in dividends or appreciation.
In pursuing financial security or more from life, people tend to pursue real estate investments or stocks (which require money to invest). These investments require time to produce enough income to provide security. Imagine or calculate how long, and at what rate of investment, it would require to amass $1 million in real estate. Not your residence, but rental real estate. It could easily take a lifetime of sacrifice, risk and management. And $1 million in real estate might earn you $5,000 a month.
Compare that to investing $1,000 once and only 10-20 hours a week for 4 to 5 years to earn the same residual income. Which is more appealing and more achievable to you? Yeah, us too.