The network marketing business opportunity has evolved over the past 60 years however it has always been a business based on building relationships with people. Some people were able to build enormous networks and earn a substantial residual income however there a lot of people who failed to achieve this success.
The Network Marketing Business Opportunity From The Beginning.
This business model was introduced in the 1950′s with a vitamin supplement company called the California Vitamin Company.
What they had noticed was that most new sales representatives were brought into the business by friends and family of existing sales representatives. The main reason for this was they wanted to buy the products at wholesale prices.
If this type of network marketing business opportunity could be done on a major scale the company could make more money by having lots of sales representatives selling small amount of products rather than a small amount of sales representatives trying to sell lots of products.
The costs to join the network marketing business opportunity as a distributor were very low compared with traditional bricks and mortar type business, and the company gave their distributors bonuses for good product sales volumes.
Distributors would recruit new distributors into their network marketing business opportunity usually from family members, friends or satisfied consumers of the company’s product. It was much easier to do this with a warm market where they had a circle of influence.
How the network marketing business opportunity worked was that a direct sales company markets and sells products directly to the consumer through people who join as distributors. These distributors commonly called independent distributors are paid on the product sales volume of their personal retail customers and well as the product sales volume of people they recruit into their team.
The incentives of team product sales and volume in the network marketing business opportunity are commonly referred to as the compensation plan. The best compensation plans focused on helping the distributor to build a business and earn a residual income.
There were little to no advertising or marketing costs to the company as all this was done by their distributors on a one on one basis. The best way to sell something is to get a good recommendation from someone you know and trust rather than a complete stranger who only wants to get into your wallet.
Many traditional companies spend millions of dollars on advertising and marketing to ensure their name or brand is well-known to consumers. Companies understand the value of multiplication of ongoing personal referrals and use this to get their name well know to consumers.
More and more direct sales companies saw how well this was working and decided to use this network marketing business opportunity business model as well. Many more network marketing companies appeared with a range of products and services for the consumer.
Throughout the twentieth century the network marketing business opportunity was promoted as a business based on building relationships with people.
Some people were able to build enormous networks and earn a substantial residual income which allowed them to retire at an early. This changed their lives as they were now in charge of their lives as they were financially free.
Failure And Success With A Network Marketing Business Opportunity
There were a lot of people who failed to achieve this success. These people usually lacked sales and marketing skills. This was not the focus of the old model of network marketing business opportunity training because of the costs of advertising and marketing.
These costs were not possible for the average person that they were targeting as suitable prospects. Instead they focused on personal development as this was inexpensive, it was easy to teach and duplicate with their downline.
The people that succeeded were the ones that understood the value of targeting the right people as suitable prospects.
Things have changed over the past 60 years and the methods that may have worked once are not longer effective.
To be successful with a network marketing business opportunity you will need to know what the things to avoid are as well as what are the things you need to do, read below, and click on the link for more information.