Network Marketing - A Brief History

September 08September 08 Alister Fuller HU003246Alister Fuller HU003246 11

WHAT IS NETWORK MARKETING (NWM)WHAT IS NETWORK MARKETING (NWM)

The definition of network means: The definition of network means: INTRICATE INTRICATE SYSTEMSYSTEM

There are various definitions, but the method we are There are various definitions, but the method we are using is: using is: FORMING BUSINESS CONNECTONS FORMING BUSINESS CONNECTONS AND CONTACTS THROUGH INFORMED AND CONTACTS THROUGH INFORMED SOCIAL MEETINGS.SOCIAL MEETINGS.


WHAT IS NETWORK MARKETING WHAT IS NETWORK MARKETING (NWM) (contd)(NWM) (contd)

This is what Allan Pease has to say:This is what Allan Pease has to say:

““The network marketing business has evolved The network marketing business has evolved virtually overnight without fanfare or advertising virtually overnight without fanfare or advertising and could eventually become the largest business and could eventually become the largest business system of them all. Its success relies on the referral system of them all. Its success relies on the referral – based distribution system and is driven almost – based distribution system and is driven almost entirely by the enthusiasm of its members. It is one entirely by the enthusiasm of its members. It is one of the most dynamic opportunities ever created by of the most dynamic opportunities ever created by the mind of man.”the mind of man.”


VARIOUS TYPES OF VARIOUS TYPES OF NETWORK MARKETINGNETWORK MARKETING

MULTI LEVEL MARKETING (MLM):MULTI LEVEL MARKETING (MLM): MLM means MLM means Multi Level Marketing. What is Multi Level Marketing. What is MLM?MLM?

Marketing means moving a product or service from the Marketing means moving a product or service from the manufacturer or provider to the consumer. Multi Level manufacturer or provider to the consumer. Multi Level refers to the system of compensation provided.refers to the system of compensation provided.

MLM MLM has different levels examples are: 3%, 6%, 9%, has different levels examples are: 3%, 6%, 9%, 12%, 15%, 18%, 21%12%, 15%, 18%, 21%

In network marketing you are in business for yourself In network marketing you are in business for yourself BUT NOT BY YOURSELF.BUT NOT BY YOURSELF.


VARIOUS TYPES OF VARIOUS TYPES OF NETWORK MARKETING (contd)NETWORK MARKETING (contd)

RETAILING: RETAILING: Is going to the supermarket, grocery store, drug Is going to the supermarket, grocery store, drug store or the department store.store or the department store.

DIRECT SALES:DIRECT SALES: Would usually but not always include Would usually but not always include insurance, cookware, Encyclopedias, the Avon lady, Tupperware, insurance, cookware, Encyclopedias, the Avon lady, Tupperware, these are examples of direct sales.these are examples of direct sales.

UNI UNI LEVELLEVEL MARKETINGMARKETING: You have : You have UNLIMITED WIDTHUNLIMITED WIDTH and limited depthand limited depth

MAIL ORDER: MAIL ORDER: You purchase from a catalog or nowadays online, You purchase from a catalog or nowadays online, eg. Amazon.comeg. Amazon.com

Note Note RETAILINGRETAILING,, DIRECT SALES, UNI LEVELDIRECT SALES, UNI LEVEL and and MAIL MAIL ORDERORDER should not be confused withshould not be confused with NETWORK MARKETINGNETWORK MARKETING


VARIOUS TYPES OF VARIOUS TYPES OF NETWORK MARKETING (contd)NETWORK MARKETING (contd)

BINARYBINARY: Means two fold ( comes from the latin text : Means two fold ( comes from the latin text bini = two by two )bini = two by two )

In In BINARYBINARY you have limited width and you have limited width and UNLIMITED DEPTHUNLIMITED DEPTH

This is the best and most used system today. This is the best and most used system today.


A BRIEF HISTORYA BRIEF HISTORY

The 1980s saw a major shift as companies began The 1980s saw a major shift as companies began managing the stocking and distribution of products as managing the stocking and distribution of products as well as commission payments to their members.well as commission payments to their members.

This allowed members to focus solely on marketing. This allowed members to focus solely on marketing.

Today, most Today, most NWMNWM companies act as logistics companies act as logistics companies that take orders, ship products and companies that take orders, ship products and calculate and pay commissions.calculate and pay commissions.


A BRIEF HISTORY A BRIEF HISTORY (contd)(contd)

AmwayAmway in particular is a frequent target for critics for in particular is a frequent target for critics for generating considerable revenues from selling generating considerable revenues from selling instructional and motivational materials to its instructional and motivational materials to its participants. participants.

The Federal Trade Commission (FTC) filed a The Federal Trade Commission (FTC) filed a lawsuit against Amwaylawsuit against Amway in 1976. Amway's victory in 1976. Amway's victory paved the way for companies to adopt a multi-level paved the way for companies to adopt a multi-level distribution system.distribution system.

http://en.wikipedia.org/wiki/Amway

http://en.wikipedia.org/w/index.php?title=FTC_v._Amway&action=edit


A BRIEF HISTORY (contd)A BRIEF HISTORY (contd)

With the arrival of the InternetWith the arrival of the Internet, NWM, NWM companies companies have started to go online. have started to go online.

Many established Many established NWMNWM companies began to use the companies began to use the Internet to promote their products. Internet to promote their products.

At the same time, many other new At the same time, many other new NWMNWM companies companies started their businesses on the Internet which we call started their businesses on the Internet which we call online online NWMNWM


TRENDSTRENDS Back in the 50’s to 60’s direct sales was the trend. Then they Back in the 50’s to 60’s direct sales was the trend. Then they

needed people like needed people like ZIG ZIGLER, FRANK BETTGERZIG ZIGLER, FRANK BETTGER and the like. and the like. Why? They could do by themselves, all what we can do put Why? They could do by themselves, all what we can do put together.together.

By the 70’sBy the 70’s MLM MLM got going and people began to know what got going and people began to know what MLMMLM was all about.was all about.

In the next decade the 80’s. In the next decade the 80’s. NETWORK MARKETINGNETWORK MARKETING spread spread world wide and many people came to know about Amway, Mary world wide and many people came to know about Amway, Mary Kay, Herbal Life, Nutralite, Usana, Omega Trend, Trend West and Kay, Herbal Life, Nutralite, Usana, Omega Trend, Trend West and many more.many more.

Today from the 90’s onwards we have what is called Today from the 90’s onwards we have what is called INTERACTIVE REFERRAL MARKETING.INTERACTIVE REFERRAL MARKETING. The reason for The reason for

this is they understood that times have changed.this is they understood that times have changed.


TRENDS (contd)TRENDS (contd)

MANUFACTURING MANUFACTURING DISTRIBUTIONDISTRIBUTION

In the 60s 70s and 80s In the 60s 70s and 80s 80% 20%80% 20%

From the 90s till today From the 90s till today 20% 80% 20% 80%

Today they knocked out all the middle men, thereby keeping costs Today they knocked out all the middle men, thereby keeping costs low; which is from low; which is from MANUFACTURERMANUFACTURER directly to directly to CUSTOMER.CUSTOMER.


LIST OF NWM COMPANIESLIST OF NWM COMPANIES Biggest Chinese MLM Company (Tianjin - China)Biggest Chinese MLM Company (Tianjin - China)

Biggest Chinese MLM Company in Brazil(Goiânia - Brazil)Biggest Chinese MLM Company in Brazil(Goiânia - Brazil)

Direct Sales Association (US), DSA Member company list.Direct Sales Association (US), DSA Member company list.

Direct Sales Association (DENMARK), DISAFODirect Sales Association (DENMARK), DISAFO

Direct Sales Association (CANADA), DSA Member companyDirect Sales Association (CANADA), DSA Member company list. list.

Retrieved from "Retrieved from "http://en.wikipedia.org/wiki/List_of_network_marketing_companieshttp://en.wikipedia.org/wiki/List_of_network_marketing_companies""

http://www.tiens.com/

http://www.tiensbrasil.com/

http://dsa.org/directory/index.cfm?fuseaction=show_CompanyResults

http://www.disafo.dk/

http://www.dsa.ca/activemembercompanylisting.htm

http://www.dsa.ca/activemembercompanylisting.htm

http://en.wikipedia.org/wiki/List_of_network_marketing_companies


LIST OF NWM COMPANIES (contd)LIST OF NWM COMPANIES (contd) Amway Amway Ameriplan Ameriplan ACN ACN Arbonne International Arbonne International Avon Products, Inc. Avon Products, Inc. Big Planet Big Planet BioPerformance BioPerformance Creative Memories Creative Memories DXN DXN Equinox Equinox Excel Communications Excel Communications Forever Living Products Forever Living Products Fortune Hi-Tech Fortune Hi-Tech

Marketing Marketing Fuel Freedom Fuel Freedom

International International Fund America Inc. Fund America Inc. HerbalifeHerbalife

Quixtar Quixtar Rexall-Sundown Rexall-Sundown Shaklee Shaklee Sibu (company) Sibu (company) Tahitian Noni Tahitian Noni

International International The Pampered Chef The Pampered Chef Tupperware Brands Tupperware Brands

Corporation Corporation Usana Health Sciences Usana Health Sciences Vector Marketing Vector Marketing Vemma Vemma Waiora Waiora Weed music distribution Weed music distribution

service service World Financial Group World Financial Group XanGoXanGo

Kirby Corporation Kirby Corporation Kleeneze Kleeneze Liberty League Liberty League

International International Mary Kay Mary Kay Melaleuca Melaleuca New Vision New Vision Neways Neways Nu Skin Enterprises Nu Skin Enterprises Omegatrend Omegatrend Oriflame Oriflame Pre-Paid Legal Pre-Paid Legal

Services, Inc. Services, Inc. PrimericaPrimerica Project Good Life Project Good Life

International International


WHAT IS PYRAMIDING?WHAT IS PYRAMIDING?

Why is pyramiding prohibited? Because plans that pay commissions Why is pyramiding prohibited? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new for recruiting new distributors inevitably collapse when no new distributors can be recruited.distributors can be recruited.

When a plan collapses, most people – except perhaps those at the When a plan collapses, most people – except perhaps those at the very top of the pyramid – lose their money.very top of the pyramid – lose their money.

Check outCheck out1. No tangible product.1. No tangible product.2. No refund clause.2. No refund clause.3. The one on the top earns the most.3. The one on the top earns the most.4. They recruit customers.4. They recruit customers.

MANY PYRAMIDS DEAL MOSTLY WITH MONEY, NO MANY PYRAMIDS DEAL MOSTLY WITH MONEY, NO PRODUCTS AND THERE IS NO REFUND. YOU LOSE.PRODUCTS AND THERE IS NO REFUND. YOU LOSE.


WHAT IS PYRAMIDING? (contd)WHAT IS PYRAMIDING? (contd)

InIn QUESTNETQUESTNET We have many We have many PRODUCTS.PRODUCTS. There is a There is a REFUNDREFUND clause. clause. Anyone in the system could be a high earner, not just the one Anyone in the system could be a high earner, not just the one

on the on the TOP.TOP. We We REFERREFER our contacts into the business. our contacts into the business.

And the beauty is you get a product which is worth And the beauty is you get a product which is worth MOREMORE than your money. than your money.


ARE THESE PYRAMIDS???ARE THESE PYRAMIDS??? The beauty of The beauty of NWMNWM is you stand is you stand

to earn your to earn your FINANCIAL FINANCIAL FREEDOMFREEDOM while holding on to while holding on to your full time jobs.your full time jobs.

How do you do that? By building How do you do that? By building a large a large ORGANISATION.ORGANISATION. Not Not by just selling the products.by just selling the products.

When you start a When you start a NWM NWM BUSINESSBUSINESS where do you start? where do you start? With theWith the FAMILYFAMILY or or FRIENDSFRIENDS

GP

GM

PARENTS

BIG BROTHER

BIG SISTER

SMALL BROTHER

SMALL SISTER

CEO MD

MANAGER

SUPERVISOR

STAFF

PERMENANT EMPLOYIES

CASUALS


UNDERSTAND THISUNDERSTAND THIS With network marketing the inventor or manufacturer can With network marketing the inventor or manufacturer can

put the product on the market without spending a million put the product on the market without spending a million dollars. There is no need to give it up to someone else, and dollars. There is no need to give it up to someone else, and pay them to market it for the inventor or manufacturer.pay them to market it for the inventor or manufacturer.

Take for example Take for example QUESTNETQUESTNET with two with two GOLD COINSGOLD COINS started this business.started this business.

Now whenever you Now whenever you REFFERREFFER their products you get paid their products you get paid handsomely and can earn a fortunehandsomely and can earn a fortune

Do you know of any banks paying this %?Do you know of any banks paying this %?


UNDERSTAND THIS (contd)UNDERSTAND THIS (contd)

Let us look at say Let us look at say COCO COLACOCO COLA.. They do not need They do not need you to move their products, they can afford to spend you to move their products, they can afford to spend millions of dollars to put it on the shelves in all the millions of dollars to put it on the shelves in all the supermarkets. They can also afford to spend millions supermarkets. They can also afford to spend millions of dollars on of dollars on ADVERTISING.ADVERTISING.

Whereas in Whereas in QUESTNETQUESTNET you are the you are the ADVERTISER.ADVERTISER. In other words you help the In other words you help the company to grow and they reward you superbly.company to grow and they reward you superbly.


UNDERSTAND THIS (contd)UNDERSTAND THIS (contd)

Most millionaires were made through network Most millionaires were made through network marketing.marketing.

STATISTICSSTATISTICS in America show that in America show that 20%20% of of millionaires are made through network marketing.millionaires are made through network marketing.

““By the way, the richest people in the world build By the way, the richest people in the world build networks - the rest look for work. What do you think networks - the rest look for work. What do you think BILL GATESBILL GATES does if it is not having a does if it is not having a NETWORK?NETWORK?” ” Robert KiyosakiRobert Kiyosaki


TRADITIONAL BUSINESS Vs NETWORK TRADITIONAL BUSINESS Vs NETWORK MARKETINGMARKETING

SET UP COST $300,000SET UP COST $300,000 MONTHLY RENTMONTHLY RENT OPEN AND CLOSE DAILYOPEN AND CLOSE DAILY DAILY PRODUCTSDAILY PRODUCTS 12 TO 14 HOURS DAILY12 TO 14 HOURS DAILY TRANSPORTTRANSPORT PAY STAFFPAY STAFF GAS/WATER/ELECTRICITYGAS/WATER/ELECTRICITY SUPERANUATIONSUPERANUATION LAWYERLAWYER TAXMANTAXMAN ACOUNTANTACOUNTANT LESS TIME FOR FAMILYLESS TIME FOR FAMILY MARKET FLUXTUATIONSMARKET FLUXTUATIONS CLOSE SHOP –NO INCOMECLOSE SHOP –NO INCOME PUBLIC HOLIDAYS ( U R closed )PUBLIC HOLIDAYS ( U R closed ) HOW MANY SHOPS CAN YOU HOW MANY SHOPS CAN YOU

OPEN?OPEN?

SET UP COST LESS THAN $1000SET UP COST LESS THAN $1000 NILNIL NILNIL NILNIL 2 TO 3 HOURS DAILY2 TO 3 HOURS DAILY NILNIL NILNIL NILNIL NILNIL NILNIL NILNIL NILNIL MORE TIME FOR FAMILYMORE TIME FOR FAMILY NILNIL PASSIVE INCOMEPASSIVE INCOME NILNIL THOUSANDSTHOUSANDS


ON REFLECTIONON REFLECTION Does anyone know of a 4 or 5 year college course where Does anyone know of a 4 or 5 year college course where

you can graduate and then hope to possibly retire within you can graduate and then hope to possibly retire within the next 4 or 5 years at better than $50,000 per year on a the next 4 or 5 years at better than $50,000 per year on a PASSIVE INCOME?PASSIVE INCOME?

InIn NWMNWM you learn within 2 years all that you need to you learn within 2 years all that you need to know to know to RETIRERETIRE within the next 3 to 5 years (that is only within the next 3 to 5 years (that is only if you are interested and are prepared to put in some if you are interested and are prepared to put in some effort.)effort.)

IN THIS COLLEGE WE TEACH YOU FOR FREE, IN THIS COLLEGE WE TEACH YOU FOR FREE, NO FEES, NO COMPULSARY ATTENDANCE, NO NO FEES, NO COMPULSARY ATTENDANCE, NO SCOLDING - ONLY LIFTING YOU ON TO A SCOLDING - ONLY LIFTING YOU ON TO A HIGHER LEVEL.HIGHER LEVEL.


ON REFLECTION (contd)ON REFLECTION (contd)

Parents pay enormous fees for their children’s education Parents pay enormous fees for their children’s education only for them to go and work for someone else’s dream, only for them to go and work for someone else’s dream, whether they like it or not.whether they like it or not.

My friends you can attend all the seminars, training, My friends you can attend all the seminars, training, listen to many motivational speakers, read all the books; listen to many motivational speakers, read all the books; but if you do not change the old habits you are going but if you do not change the old habits you are going nowhere.nowhere.

YOU ARE WASTING YOUR VALUABLE TIME.YOU ARE WASTING YOUR VALUABLE TIME.


YOU CHOOSEYOU CHOOSE

You have two choices You have two choices

1. 1. DO SOMETHING AND GET SOME WHEREDO SOMETHING AND GET SOME WHERE

OROR

2. 2. DO NOTHING AND GET NO WHERE.DO NOTHING AND GET NO WHERE.

That is where the 95% ers go anyway.That is where the 95% ers go anyway.


I LEAVE YOU WITH THIS THOUGHTI LEAVE YOU WITH THIS THOUGHT So what is the one thing that guarantees success? Not knowledge, not So what is the one thing that guarantees success? Not knowledge, not

education, not training, not experience, not money. It is education, not training, not experience, not money. It is BELIEF. BELIEF. BELIEFBELIEF in a project and belief in yourself are vital to in a project and belief in yourself are vital to SUCCESS.SUCCESS.

Believers are a terrific breed of men and women. Nothing daunts Believers are a terrific breed of men and women. Nothing daunts them. They are afraid of nothing. If they have doubts, they rise above them. They are afraid of nothing. If they have doubts, they rise above them. They become persons of power. These big, rugged souls sweep them. They become persons of power. These big, rugged souls sweep everything before them. They are doers, achievers, winners. They everything before them. They are doers, achievers, winners. They have the magic word have the magic word BELIEF.BELIEF.

The person of belief never goes crawling through life on his hands The person of belief never goes crawling through life on his hands and knees, whining and whimpering that it’s all too much, that he is and knees, whining and whimpering that it’s all too much, that he is being treated unfairly. Instead such a person looks adversity straight being treated unfairly. Instead such a person looks adversity straight on and then affirms, “ as a child of the good Lord, I am greater than on and then affirms, “ as a child of the good Lord, I am greater than anything that can happen to me.” anything that can happen to me.” HE WILL TAKE CARE.HE WILL TAKE CARE.

This was taken from ‘WHY SOME POSITIVE THINKERS GET POWERFUL RESULTS’ by DR NORMAN This was taken from ‘WHY SOME POSITIVE THINKERS GET POWERFUL RESULTS’ by DR NORMAN VINCENT PEALEVINCENT PEALE



Business

Network Marketing - A Brief History