Network Marketing - A Brief History

Network Marketing Explained

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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.

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

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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.

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VARIOUS TYPES OF VARIOUS TYPES OF
NETWORK MARKETING (contd)NETWORK MARKETING (contd)
RETAILING: RETAILING: Is going to the supermarket, grocery store, drug store Is going to the supermarket, grocery store, drug store
or the department 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

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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.

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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 calculate companies that take orders, ship products and calculate
and pay commissions.and pay commissions.

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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.

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A BRIEF HISTORY (contd)A BRIEF HISTORY (contd)
With the arrival of the InternetWith the arrival of the Internet, NWM, NWM companies have companies have
started to go online. 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

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TRENDSTRENDS
Back in the 50’s to 60’s direct sales was the trend. Then they needed Back in the 50’s to 60’s direct sales was the trend. Then they needed
people like people like ZIG ZIGLER, FRANK BETTGERZIG ZIGLER, FRANK BETTGER and the like. Why? and the like. Why?
They could do by themselves, all what we can do put together.They could do by themselves, all what we can do put 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 this The reason for this
is they understood that times have changed.is they understood that times have changed.

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TRENDS (contd)TRENDS (contd)
MANUFACTURING DISTRIBUTIONMANUFACTURING DISTRIBUTION
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.

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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 company list.Direct Sales Association (CANADA), DSA Member company list.
Retrieved from "Retrieved from "http://en.wikipedia.org/wiki/List_of_network_marketing_companieshttp://en.wikipedia.org/wiki/List_of_network_marketing_companies
""

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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
Rexall-Sundown
Shaklee
Sibu (company)
Tahitian Noni
International
The Pampered Chef
Tupperware Brands
Corporation
Usana Health Sciences
Vector Marketing
Vemma
Waiora
Weed music distribution
service
World Financial Group
XanGo
Kirby Corporation
Kleeneze
Liberty League
International
Mary Kay
Melaleuca
New Vision
Neways
Nu Skin Enterprises
Omegatrend
Oriflame
Pre-Paid Legal
Services, Inc.
Primerica
Project Good Life
International

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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 very When a plan collapses, most people – except perhaps those at the very
top of the pyramid – lose their money.top of the pyramid – lose their money.
Check outCheck out
1. 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.

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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 on Anyone in the system could be a high earner, not just the one on
the 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.

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

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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 %?

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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 company In other words you help the company
to grow and they reward you superbly.to grow and they reward you superbly.

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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

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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

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

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

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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.

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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 them. 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 They become persons of power. These big, rugged souls sweep
everything before them. They are doers, achievers, winners. They have everything before them. They are doers, achievers, winners. They have
the magic word the magic word BELIEF.BELIEF.
The person of belief never goes crawling through life on his hands and 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 being knees, whining and whimpering that it’s all too much, that he is being
treated unfairly. Instead such a person looks adversity straight on and treated unfairly. Instead such a person looks adversity straight on and
then affirms, “ as a child of the good Lord, I am greater than anything then affirms, “ as a child of the good Lord, I am greater than anything
that can happen to me.” 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

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