The Truth and History of MLM or Network Marketing
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The Company Wins, too

Permalink 04/14/04 13:37, by admin, Categories: Original Document


Why are so many companies utilizing network marketing as their chosen method of marketing? Simply stated, it's more efficient! They do not pay for marketing, distribution or sales until after the sale is made and the product is delivered. Compare that to traditional marketing where a company can spend millions of dollars on advertising, as well as all costs associated with an employee based sales force, such as benefits, support staff, communication, travel and office, before any product is sold. Charles Givens, financial expert and best selling author of Wealth Without Risk, points out that 80 percent of the cost of getting a product to consumers today is the result of marketing expenses. Companies are looking to move their cost as close to the point of sale as possible. Network Marketing companies replace traditional advertising and marketing costs with sales commissions to the independent representatives, paid after the product is sold.

In her best selling book, The Popcorn Report, Faith Popcorn explains additional societal trends driving the success of Network Marketing. Her book describes consumers as having a desire to cocoon and stay at home. She believes that they wish to avoid crowded malls and traffic jams, and are looking for the convenience of direct delivery of the product that Network Marketing provides. Advertising Age magazine states that the recommendation from a friend is the most powerful form of advertising; that is what Network Marketing is all about.

The changing work place has demonstrated that there is no security in the traditional corporate structure and career path. In the United States over 3,100 jobs are lost each day due to downsizing. Automation and technological advances are streamlining business and changing entire industries. Millions of people will be out of work searching for the same kinds of jobs their former employers just eliminated, in another company that just hasn't yet streamlined. This is postponing the inevitable; In fact, 47 percent of the companies that made up the Fortune 500 in 1980 are no longer in operation today, which represents a net loss of more than five million jobs!

Technological advances affect the work forces of entire industries. One example is the vinyl record business. In 1985, vinyl records supported a $24 billion a year industry. Today it is all but extinct, having been replaced with producers of cassettes tapes and compact discs. The steel and copper industries have suffered with the advent of new plastics and alloys. The functions computers are able to execute have caused the replacement of millions of workers. Robotic technology similarly has taken its toll in the workplace. One robot can replace twenty human workers and extinguishes the need for companies to pay exorbitant amounts in employee benefits. Man Power Inc., a temporary service, is now one of the largest employers in the world because companies are finding it less expensive to hire temporary employees and thereby avoid paying benefits to permanent employees.

Marketing on a part-time effort can provide a financial cushion of residual income to protect oneself from such events. A recent Wall Street Journal survey found that 80 percent of the work force want to own their own business and 40 percent surveyed would like to work at home. This is exactly what network marketing provides. People are searching for ways to build a future that develops leadership and provides a balance in their lives for their families and each other, without sacrificing their sanity in the process.

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