Work from home information and basic understanding of network marketing
Work from home, network marketing, home based business, mlm, multi-level marketing. What are all these terms and what is the difference between them?
Relax, we are here to relieve your stress and explain the differences and aid you in choosing which path you would like to go down to achieve your FINANCIAL FREEDOM. After
all, isn't that why you are here?
J. Paul Getty once said “I would rather earn 1% off a 100 people's efforts than 100% of my own efforts.”
Working from home has never been easier with the invention of the internet. You can now reach millions with your new business opportunity. But which opportunity is right for you? This site
is dedicated to helping you choose what's best for you and your lifestyle. From network marketing companies and mlm businesses to stand alone work from home business opportunities. We will take
a look at the most popular and innovative businesses and explain the do's and don'ts of how to work successfully from home.
Compensation plans are probably the most confusing part of all multi-level marketing companies. Your FINANCIAL FREEDOM is dependent on how well these compensation plans pay out.
Not all are created equal. Many network marketing companies require a huge investment just to be part of it all. Other mlm business opportunities require little to no up front costs.
If you are serious about working from home then you need to BOOKMARK this site now. There is no way you can absorb all the information here in one sitting.
This site is dedicated to you and will keep you from making costly mistakes that other network marketers have made. So if you are ready to learn from the professionals
then sit back and begin your journey to understanding how to successfully work from home and achieve your FINANCIAL FREEDOM.
To begin, watch this video Network Marketing Basics and if you want to learn more after watching this video then please continue viewing all the pages on this site.
Network Marketing Basics and FAQ's
Let's start by saying what network marketing is not:
an illegal pyramid scheme which pays commissions to people to recruit other people
a "Get Rich Quick" scheme
a company with a large entrance fee to join
a company without a viable product or service
These are common misconceptions that have no place in today's home based businesses.
What network (aka multi-level) marketing is:
passive residual income
complete financial freedom possible with full on commitment
work from home
freedom from time constraints
travel opportunities
excellent tax breaks
a great opportunity for personal growth
a positive work environment
Major companies spend approx. 1/2 of income on advertising. Just ask Budweiser. In a home based business the company uses word of mouth advertising instead of traditional expensive methods. When you sign up to be a distributor or associate you just became a member of their sales force and the success of your business will depend on you getting the word out to others.
When you sign up you become an independent business owner. You get paid a commission when someone you refer places an order. Depending on the type of business you can also make money when you buy the product at wholesale rates and resell at retail. The marketing is done through your own advertising as an independent business owner. The company has eliminated a lot of marketing costs--it divides it among it's distributors instead of an advertising agency .
If you sign someone under you to become a distributor (your downline) you will get a small percentage of the business they generate. This is referred to as "passive residual income". If you are successful and you help your downline succeed, the amount of residual income can grow over time. Multiply this over and over and you see how you can build significant residual income. This is the basics of work from home aka MLM businesses.
Multi-level Marketing aka MLM Marketing
Julia Tang explains:
Multi-level marketing is the biggest growth industry in the 1980's. It is the industry that has made corporate giants of Amway, Shaklee, Mary Kay and Herbalife. It has been termed as the last true rags-to-riches opportunity left in North America, and its ability to bring enormous incomes to almost anyone is legend. In fact, it is expected to make more new millionaires by 1990 than any other industry, and soon after will be the single most popular method of bringing new products to the consumer.
The first multi-level marketing companies sprung up in the 1930's, but they were dinosaurs compared to modern marketing strategies. It wasn't until the mid 60's that MLM gained international prominence. In 1985, it is estimated that $5 billion worth of new products will be sold by this method.
MLM offers the opportunity for anyone to operate their own business. For less than $50 in many cases, you can get involved with a legitimate MLM program and earn from $100 a month to hundreds of thousands of dollars a year. Most incomes naturally fall between those two extremes, but the earning potential in almost any good company is virtually unlimited. The only limits are set by marketer himself, by his time, energy, persistence, and faith in his product the people he works with. A superstart in multi-level marketing need only be a caring, sharing person, energetic and highly motivated. Some of the most amazing success stories in MLM have been hard-luck Harry's and bored housewives with no previous marketing or sales experience.
Before you get involved with any MLM you need to READ THIS first. The truth shall be revealed.
The root of MLM success is the sponsoring of new people into their businesses, much in the same way sales agents find new retailers to handle their products. Successful organizations such as Amway and Mary Kay have thousands of distributors, but even these had to start with one or two motivated people sponsoring a few other motivated people.
The ultimate test of an multi-level marketing company is the quality, price and reusability of the product. A good firm is usually founded on products with rapidly expanding popularity, day-to-day use in the home, and a regular repurchase required. They should be better quality and at least as competitively priced as the same goods bought in stores.
Here are the barebones mechanics of MLM
1. You become involved with an MLM company first as a customer because the product offers substantial quality and savings.
2. Because the products are good, you tell others about them.
3. Rather than send these people to your distributors, you become a sponsored distributor yourself for these new people. And if these people, let's say the are five, know five other who will buy the product, you have 25 people buying products through you.
4. If these 25 each know five people, you have 125. If those 125 know five people, you have 625 at the fourth level buying through you in a distributor's network you built from only five people. If these people purchased only $30 month worth of products, that would be $300,000 in gross sales, and you could expect to earn at least one quarter of that figure, probably much more.
5. Commission and bonuses vary with product and company, but most go through four to eight levels, and have two or three levels at which substantial higher commissions are paid. This encourages new distributors to build those levels.
6. Some of the networks-inside-of-the-networks will end at certain levels with people buying but not sponsoring new people. And some will involve more than five people. Distributors will always be your best customers and biggest moneymakers.
7. The best companies are the blue chip firms offering a wide range of products such as Amway and Shaklee. New ones emerge all the time and some of the faddier multi-level marketing companies die quickly. but they can still make good money quickly for distributors with established "downlines".
Choose your product line carefully, recruit heavily and always expand your business education as you grow. Multi-level marketing is a big field with big rewards for anyone, absolutely anyone who can commit themselves to success at any cost.
Some more insight to MLM business opportunities comes from Dave Mott. He writes:
Multilevel marketing (MLM), or network marketing, is a system of direct selling that relies on networks of independent distributors, usually private individuals, to reach customers by word-of-mouth. Multilevel systems provide an alternative to conventional arrangements that involve wholesalers and retailers. Besides eliminating costs associated with middlemen, network marketing reduces advertising and promotion expenses and, in theory, passes savings to the independent distributors and customers.
However, because multi-level marketing frequently involves constant recruiting of new distributors and a pyramidlike financial structure, it has been a controversial practice for most of its history. In scores of massmarket books aimed at would-be entrepreneurs it is presented as little more than a get-rich-quick scheme—gushing about achieving "financial independence" through MLM—and historically MLM organizations have more than once crossed the line into criminal activity.
According to the Direct Selling Association (DSA), the leading trade group for MLM and other direct-selling organizations, as of 1998 multi-level marketing in the United States generated more than $17 billion in annual sales. MLM that year accounted for 73.5 percent of all U.S. direct-selling revenues. Nearly 8 million people were involved in selling via multi-level marketing, for a national average of just $2,125 a year in sales per worker, highlighting how little the typical MLM salesperson actually makes—and this is before deducting the cost of the merchandise. By contrast, most other areas of retail trade, such as grocery stores, clothing stores, or health and beauty stores, tend to bring in well over $100,000 per worker, although admittedly these businesses have a much higher overhead. Based on DSA statistics, approximately 58 percent of the direct-selling workforce (including multi-level marketing and other direct selling) was female, and almost 83 percent worked fewer than 30 hours a week at direct selling.
Household products such as cleaning preparations and kitchen utensils are by a slim margin the most popular direct-selling products, according to the DSA. Personal care products like cosmetics and toiletries rank second, followed by wellness products (e.g., vitamins), household leisure and educational products, and a variety of other products and services. The first three categories—household, personal, and wellness items—represent a full 76 percent of all direct sales by value. Nearly 70 percent of all direct sales occur face-to-face in homes, while 10.9 percent are conducted over the phone (usually as a follow-up to a personal demonstration), 10.7 percent at the salespeople's other workplaces, and the remaining 9 percent in various other ways.
Some of the largest multi-level marketing based companies in the United States (and in some cases, the world) are Amway Corp., Excel Communications, Inc., Herbalife International, Inc., Mary Kay Inc., Nu Skin Enterprises, Inc., Pampered Chef, Ltd., Shaklee Corp., and Sunrider International.ORIGINS AND DEVELOPMENT
MLM was pioneered in the 1940s by Carl F. Rehnborg, an American. Rehnborg learned about the value of nutrition while scavenging for food in a Chinese internment camp in the 1920s. After he was freed, he started Nutrilite Products Inc., a manufacturer of vitamin-enriched food supplements. Rehnborg was extremely successful at marketing his products through an innovative distribution process that would become known as multilevel marketing. Nutrilite flourished throughout the 1940s and 1950s and was eventually purchased in 1959 by Amway Corp., a company founded by former Nutrilite distributors. Using similar MLM tactics, Amway, now a multibillion-dollar enterprise, thrived and spawned a string of imitators during the 1960s and 1970s.
During the 1960s and 1970s, fraudulent pyramid schemes exploited the success of multi-level marketing companies. Although they closely resembled MLM organizations, pyramids bilked investors and members out of millions of dollars. A mass of legislation passed during the 1970s almost ended multi-level marketing altogether, including organizations like Amway. However, laws were eventually modified to accommodate legitimate multilevel marketers and similar organizations.
Tupperware, for example, achieved stellar sales during the 1960s and 1970s with techniques that mimicked MLM systems. In fact, network marketing has traditionally been associated with cosmetics and household items. Still considered in its infancy, MLM was increasingly used in the 1980s and early 1990s to sell products and services ranging from vacations and books to software and food items. During the 1990s, services were an increasingly important growth category for MLM, which made inroads into such service industries as legal services, broadcasting and computer network services, and long-distance telephone services. Multi-level marketing BASICS
In essence, MLM uses customers to distribute products (or services). A company begins by selling its product to selected customers in specific geographic areas. Those customers then become salespeople by telling friends, associates, and contacts about the product and trying to get them to buy. The salespeople are usually paid a commission for the products that they sell. More importantly, they also receive commissions for the products that their customers, or recruits, sell. In other words, new customers are added to the sales network, many of whom also become distributors. As the number of levels of customers grows, so does the distribution network. Thus, by trying to sell the products themselves, customers also become recruiters for the company that represents the products.
MLM organizations are based on commissions that accumulate exponentially. For example, assume that Sandy buys some products from a distributor in the multi-level marketing company. She then sells the product to five of her friends and receives a commission. Next, three of her friends sell the products to six of their friends. Not only would those three salespeople receive a commission, but Sandy would also receive a (usually smaller) commission for each of the sales. If four of the six new customers each sold to four contacts, the number of people that could potentially be selling products to Sandy's benefit would suddenly lurch past 15. It is easy to see how the sales network originated by Sandy could quickly jump into the hundreds or thousands. In theory, all of the people in the network would benefit from the efforts and purchases of the people below them.
The compensation system is the infrastructure that supports and drives a MLM program. Sellers in the network usually receive relatively large commissions on sales that they make personally. The commission is the difference between what the salesperson sells the products for and what he (she) must pay to buy them from the company. In addition, purchases made by the same customer at a later date will often result in "residual income" to the person that made the first sale to that buyer. As sellers build a network of customers that also become sellers, they also earn group bonuses, or "overrides." An override is the fraction of sales that is paid to the originator of a network. In general, sales made by distributors further down the network, or at lower levels, pay a lower bonus.
Sellers may also get a "leadership bonus," which is effectively a bonus paid to sellers that help distributors in their network to achieve specific levels of sales success. Leadership bonuses provide an incentive for sellers to train and help their customers to become better distributors and recruiters. "Usage" bonuses are provided to sellers based on the total purchases (product usages) by members of their network. Usage bonuses usually take the form of discounts on air travel or long distance telephone service. They provide an impetus for people in the organization to continue purchasing the goods themselves.ADVANTAGES AND DRAWBACKS
The obvious enticement for members of a MLM network is the seemingly unlimited profit potential. By purchasing as little as, say, $100 worth of a product, they can become distributors in a network that can pay them thousands or, theoretically, millions of dollars. In addition, multi-level marketing sellers get to be their own boss, make their own hours, and choose their own course to success or failure. They also get the advantage of buying the product at nearly the wholesale price.
The company that initiates and supports the network and supplies the products or services may also benefit significantly. It will likely incur costs associated with supporting the organization, including those related to making training videos and audio tapes, warehousing, transportation, and printing brochures. However, even after paying commissions, its advertising and promotion costs may be much lower than those of traditional marketing and distribution channels. Start-up capital requirements are usually much lower because the bulk of the marketing costs are not incurred until the products are actually sold. And the company benefits from strong customer loyalty and a solid base of repeat customers. Furthermore, Multi-level marketing is more effective for some types of products than is traditional mass media because sales are conducted face-to-face.
Despite its many advantages, network marketing possesses several drawbacks that make it undesirable for many companies. For instance, it usually takes a long time to develop a large, profitable customer base compared to selling techniques like advertising through print and broadcast media. Furthermore, administrative duties and paperwork are usually much greater for MLM operations. Perhaps the greatest disadvantage of network marketing, though, is that the company loses control of its distribution process. It may have no idea of the types of people that are representing (or misrepresenting) its products. A corporate or product image can become quickly tarnished by overly enthusiastic or dishonest salespeople hungry for commissions.
Multi-level marketing also has several disadvantages for sellers. Long hours are typically required to get a sizable network started, particularly if the product or service is perceived to be of average value by potential consumers. Because of poorly contrived or fraudulent MLM schemes, moreover, many people have attached a stigma to network marketing that sellers must overcome. Indeed, a major drawback of MLM to distributors is risk—they may lose their initial investment or be lured into purchasing additional goods or services that they will never use if the company backing the network is ill-willed or poorly operated.PYRAMID SCHEMES
Numerous laws exist that regulate MLM organizaions to protect consumers against fraud. Most of those laws are designed to discourage pyramid schemes, which closely resemble legitimate multi-level marketing systems. The difference between pyramids and legal network marketing is that the latter derives income from the sale of products. In contrast, pyramid organizations get most of their income by bringing new members into the network, or pyramid, and charging them fees.
The classic pyramid scheme is the chain letter. For example, a person might send letters to ten individuals asking for a $1. He would give each person ten names to which they should send the same letter. Theoretically, as the chain multiplies into a pyramid massive sums of money will flow from the people at the base of the pyramid to those at the top. As the pyramid continues to expand, people that were at the bottom see levels added, effectively moving them away from the bottom and bringing them cash from newcomers. Unfortunately, pyramids inevitably collapse. People at the top profit from the misfortune of those at the base. The problem is obviously more serious than the chain letter example when larger amounts of money and effort are required of pyramid members and promises of wealth go unfulfilled.
Some pyramid organizations disguise their objective by mimicking MLM companies. They integrate into the scheme a product or service that they "sell" to newcomers—a strategy known as inventory loading—or they simply charge sellers a fee to join the network. Then they encourage members to recruit, rather than sell the product to, other people.PROTECTIONS FOR SELLERS
Because of potential abuses in multi-level marketing, there are a number of protections for sellers, in addition to criminal laws which outlaw true pyramid schemes. The Direct Selling Association maintains a code of ethics that its 140 member companies must abide by. DSA members include many of the largest MLM companies in the United States. The ethics code requires that member companies buy back distributors' excess inventory at least 90 percent of the purchase price, forbids misleading representations to salespeople and consumers, and discourages high entry barriers that can inflate upstream revenues while leaving downstream sales representatives stuck with excess inventory. The DSA also maintains a complaint resolution process for consumers who believe they've been cheated by direct-selling companies.
To learn more about MLM business opportunities visit our Multi-level Marketing Do's and Don'ts page.
Work From Home Information
Unlike Network Marketing and Multi-level businesses there are many other types of work from home businesses that are stand alone. My wife is a career medical biller and now works from home for one of the many companies offering medical billing as a home based business. From licking envelopes to online auctions, we will take a look at the top income earning home based businesses.
Work From Home Job Searching
To get started, consider, for now, your job search as your job. Dedicate as many hours per week to your search for employment as you would spend working. If you're looking for full-time work, you should be spending full-time hours seeking employment. Networking remains the top way to find a job and it does work. Develop contacts - friends, family, college alumni, even the other job seekers who participate in the Job Searching Discussion Forum - anyone who might help generate information and job leads. You can take a direct approach and ask for job leads or try a less formal approach and ask for information and advice. Contact everyone you know and tell them you want to work from home. You may be surprised by the people they know and the leads you can generate.
Work at Home Job Sites
Visit the specialized sites that focus work-from-home jobs or in freelance opportunities. At 2work-at-home.com you can search jobs by category, keyword, and location. You'll also find a list of telecommuting friendly companies. Check out the company web sites for current openings. Free Work @ Home Jobs has job listings according to category - Accounting/Finance, Administrative/Clerical, Sales, Web Development, and Writing. Moneymakingmommy.com also lists jobs according to category. There is also a list of companies that hire online workers, as well as information on home business ideas and freelance jobs. Wahm.com's lengthy list of job openings is updated regularly. These are just some of the sites you'll find in our work at home jobs directory. Look through all the sites and remember to take advantage of the Resume Posting section, if the site has one. That way companies seeking employers will be able to find your resume.
Next, search the online job banks using keywords like "work at home" "telecommute" and "telecommuting". Searching Monster, for example, using "telecommuting" as a keyword generates almost 200 listings. "Work at home" generates close to a 1000 positions. Searching HotJobs and FlipDog brought similar results. Go through all the Job Bank sites, starting with the top sites, then moving on to the smaller and niche sites.
This is a time when it make sense not to simply search the web search engines. I've found that searching for "work at home" most often brings up scams or web sites that want to charge you for providing "real" work at home jobs or for "proven successful" home business information. Rather, stick with the sites that focus on employment.
Be prepared to apply online. Have a resume and cover letter ready to send. Depending on the type of employment you're looking for you may also need work samples to send to prospective employers. Track where you've applied. Many of the same positions are listed on multiple sites, so you'll want to be sure not to duplicate your efforts.
Before you jump on an opportunity that sounds wonderful, review our tips and suggestions for avoiding scams, and for successfully working from home.
Tips for Avoiding Work From Home Scams: There are more work from home job scams than there are real work from job listings, so, job seekers need to be really careful when searching for and evaluating work at home job listings. Presume that the position is a scam, unless there is compelling evidence to the contrary. Take the time to research the position, the company including talking to other people who work there. That way, you wont be scammed and you will be using your best efforts and best judgement to find a legitimate work from home job.
If it sounds too good to be true, it is.
Evaluate every listing you look at very carefully. Find out if there's a salary or if you're paid on commission. Ask how often are you paid. Ask what equipment (hardware/software) you need to provide.Find out what support the company provides?
If you get an unsolicited email telling you that a company that you have never heard of wants to hire you for a job where you don't need experience or skills and can make a lot of money, trash it. There's lots of out there, some of which are personalized and sound quite legitimate.
Be carefully of listings that guarantee you wealth or financial success or that will help you get rich fast from home. They will probably do none of the above.
Do not send money! Legitimate employers don't charge you to get started or for anything else.
Also, don't send money for work at home directories or start-up kits. Free information and job listings are available online.
Ask for references - request a list of other employees or contractors to see how this has worked for them.
Work at Home Suggestions:
Be flexible - consider freelance work or projects as well as full-time employment. At least it will get you started.
Employed now? Ask your employer about the possibility of work some hours from home.
Be patient and be prepared to spend a lot of time weeding through scams and junking listings to get to legitimate openings.
Network Marketing Success Tips
To succeed in network marketing requires dedication and motivation. Here are some success tips we have used to reach our goals.
7 Tips for Network Marketing Success A direct-selling expert shares what it takes to start out and make it in this industry.
By Devlin Smith
You probably have an image firmly planted in your mind of what network marketing (also known as direct sales or multilevel marketing) is all about--housewives buying and selling Tupperware while gossiping and eating finger sandwiches, or a high-pressure salesperson trying to convince you how easily you can become a millionaire if only you and your friends and their friends and so on would buy and sell vitamins with him.
Both of these images couldn't be further from the reality of network marketing. It's neither a hobby nor a get-rich-scheme but an opportunity for you to earn money running your own part- or full-time business.
But what does it take to succeed in this industry? Vincent J. Kellsey, director of member services for the Direct Selling Women's Alliance, an organization that provides a variety of resources to women and men in the direct-selling industry, offers these success tips for making it:
Choose wisely. There are six key elements you should be looking for [when selecting an opportunity].
Success tip Number one: stability. How old is the company?
Success tip Number two is excellent products or services that consumers will use and need more of.
Success Tip Number three is the pay plan--how even and fair and generous overall is the distribution? This is really crucial as the pay plan represents exactly how you'll get paid--or not get paid. There are really only two questions to ask [regarding this]: How many pennies out of each sales dollar get paid back to the distributors each month, and how fair is the distribution of these pennies between the old members and the new members?
Success Tip Number four is the integrity of the company and the management. As much as possible, [investigate] the experience of the CEO, [their] experience in the network marketing industry, and their background. [Have] they been successful in other companies in the industry? Do they have a good reputation?
Success Tip Number five is momentum and timing. Look at where the company's at, what's going on with the company, and if it's growing.
Success Tip Number six is support, training and business systems. You may have [chosen] a great company with excellent management, products that make a difference, a pay plan that's uniquely fair and very generous, and momentum and stability, but if you don't have a system in place that works, all of that [doesn't matter]. Most companies will have a transferable training system that they use, and that's where mentorship comes in.
Practice what they teach. [To succeed,] you need to be willing to listen and learn from mentors. The way this industry is structured, it's in the best interests of the [MLM veterans in your company] to help you succeed, so they're willing to teach you the system. Whatever [your mentor] did to become successful, it's very duplicatible, but you have to be willing to listen and be taught and follow those systems.
The higher-ups. It can be called various things, but the general term is the "upline," meaning the people above you. How supportive are they? Do they call you? Do they help you put a plan in place? Are they as committed to your success as they are to their own? You should be able to relate to [the people in your upline] and be able to call them at any time to say "I need some help." How much support there is from the people above you in the company is very important.
Take up the lead with your downline. There's a term in the network marketing industry called "orphans"--when somebody is brought in and then the person who brought them in is just so busy bringing in other people that they don't spend the time to teach and train [the new person]. You should be prepared to spend at least 30 days helping a new person come into the industry--training them, supporting them and holding their hand until they feel confident to be able to go off on their own. You really need to ask yourself, are you willing to do that? Are you able to do that? This is really about long-term relationship building. It's not about just bringing people into the business and just moving forward. It's about working with these people and helping them to develop relationships.
On the net. People are utilizing [the internet] as their main marketing tool. [You can set up your site] with autoresponders so when you capture leads, the autoresponder can follow up with that person. One of the greatest keys to success in this industry is follow-up. Many people will have someone call them who's interested or they'll call the person and say they're interested, but then they don't follow up with it. Automation on the internet has allowed a much more consistent method of following up.
The only drawback with the internet is people who utilize it to spam. If there was one thing I could put forward to say, "Do not do" when utilizing the internet as a marketing tool, it's spamming because that can give a very bad reputation not only to you but also to the company you're working with.
Taking care of business. This is a business, and just like if you were running a franchise or a storefront, you [should have an] accountant. You have all the same write-offs tax-wise that you have with running a [full-time] business, so it's very important to [do your research] prior to getting involved, before you start making money from it. How is that going to affect you tax-wise? What are your write-offs?
It's important to set up a [support] team around you. I'd suggest seeking out lawyers who deal in network marketing, so they're very versed in all the laws and how that affects [your business.]. There are also accountants who specialize in dealing with homebased businesses specifically in the direct-selling industry.
Don't quit your day job...yet. Never leave your full-time position unless you're absolutely certain that the income that's coming in with this company is going to be there. [Be sure that] you've been with the company [for awhile] and that you know it's a stable company, and the income that you're earning is equal to or greater than the income you're earning from your job before quitting.
Last but not least success tip from the staff here at Work From Home Info is to get your own SiteBuildIt! web site and proclaim your freedom from the drudgery of old school network marketing. WE know it works because YOU ARE HERE!
More can be found at More Success Tips
