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What is Network Marketing and How Can You Succeed as a Network Marketer?

Chances are you’ve been pitched on joining a network marketing business, or you’ve heard the term thrown out and now you’re researching to learn more about the industry.

In this article, I’m going to breakdown what network marketing is, who it’s for and not for, why you should consider joining, and also how to succeed in the industry. 

If you are skeptical about large payouts and big passive income with little to no work, well, congrats, you should be. 

That’s often the pitch and promise made by many network marketers.

The point of this is to hopefully help you navigate the truth about network marketing opportunities and uncover whether they have any merit.

Before I get into that, let me share a little about my network marketing experience so you know the information on this page isn’t coming from someone with a hidden agenda.

What Is Network Marketing?

Network marketing is often referred to by many names such as multi-level marketing (MLM), direct sales, and home-based business.

Although the exact creation of the business model is often disputed, it’s believed that network marketing has been in existence since the 1920s.

The structure and compensation plan ultimately is dependent on the individual company, however, most companies follow a similar approach.

The company’s products or services are sold through independent representatives of the company.

These independent representatives are also referred to by many names such as reps, distributors, independent business owners, and consultants to name a few.

Essentially, these independent representatives act as a marketing channel for the network marketing company and they share the products or services with their network.

Instead of companies paying money for advertising, they take that money and pay the representatives a percentage of a sale made when that purchase was made through that representative. 

Representatives can either choose to build a customer base that solely consumes the product or uses the service, or they can also choose to build a team of other representatives that build the business in addition to building a customer base. 

These people are your team are known as a downline.

Once a sale is made through a team member, the percentage of that sale is passed on to not only the referring representative but in many cases to the team above them known as an upline. 

Despite what many people believe…

Network marketing is NOT a pyramid scheme.

Those that don’t understand how to explain it or hound their friends and family with the “next best opportunity” can definitely create some skeptics that instantly think “pyramid!” – No question. 

But again, this is just because of improper experience and training of the reps, not because of the actual model.

A Pyramid or Ponzi scheme operates off of the principle of “robbing Peter to pay Paul.” 

In other words – illegal and very short term. 

Network marketing is perfectly legitimate, legal and in fact, endorsed by some of the biggest names in finance. 

Most people wonder if network marketing is a pyramid scheme because of two things.

  1. The structure is shaped like a pyramid

Can you think of one corporate structure or organizational chart that isn’t shaped like a pyramid? 

It’s a common misconception that people have because of the stigma that salesy, untrained network marketers have given the profession with their approach. 

Almost anything out there that has a company structure is shaped like a pyramid in some way, shape or form, and it has absolutely NOTHING to do with the legitimacy of the model.

  • The term “pyramid” is thrown around pretty loosely 

Frankly, oftentimes the structure is shaped like a pyramid, or they’ve just heard the term used and don’t actually know what it means.

In actuality, network marketing is one of the most regulated industries around “Pyramid or Ponzi” type activity. 

Network marketing companies have some of the strictest laws and therefore are extremely careful with how they incentivize the reps building their teams.

If you come across a company that ONLY pays people based on recruiting – RUN because it won’t be around long. 

There are definitely people that start MLM companies that don’t know what they’re doing and create bad press. 

The unfortunate fact is that they disguise the business model like network marketing but aren’t compliant with the Federal Trade Commission. 

Of course, the media has a hay day with these stories, but in actuality, it’s a VERY small percentage of the network marketing profession as a whole.

However, when you find a solid company that pays people based on the sales of products from yourself and the team you build underneath you (which is most MLM’s), then this is perfectly fine and a great way to create a residual income.

Take real estate brokers for example. They bring on agents, and in turn, get paid on every sale of a home within the brokerage. 

The same applies to network marketing; it’s literally the exact same concept, the only difference is that it goes to multiple levels.

When you decide to join a company and build the business, it’s important that you take the time to do your due diligence on things like the company, founders, business model, and compensation structure.

Who Network Marketing Is & Isn’t For 

Now that you have a better understanding of what network marketing is, let’s talk about who it is and isn’t for.

To be honest, network marketing IS NOT for everyone. 

Despite being a very legitimate industry, network marketing tends to get a bad rap and many people blast it as being shady, or not legit.

In most cases, those people are typically either misinformed about the profession or had a bad previous experience with the model (or know someone that has).

I’m going to give it to you straight.

To build a network marketing business YOU HAVE TO BE TOUGH.

If you can…

  • Not require acceptance or approval from friends and family 
  • Commit to attend your company events, work on your skills and regularly ask people if they are open to your product/service/opportunity 
  • Have a 5-year plan vs. a 30 day or less plan…

Then network marketing is a great option.

When You Should Join A Network Marketing Company

In the gig economy, it is now easier for some to make small amounts of money, however, if you really need money you may consider an option like network marketing that has leverage.

When people ask me what I made my first month in network marketing I told them I didn’t know exactly because I was still getting paid on memberships I brought in that first month even though it was five years later.

That’s why MANY entrepreneurs get their start in network marketing and that start is not always perfect.

If you are being hyped about low work, large payout, it isn’t true. 

In most cases, people aren’t being taught that by their company, they are just saying what they think they should say because they don’t have real experience as an entrepreneur. 

Like ALL professions there are people in network marketing that DO stretch the truth and don’t run their business with integrity.

Understand that network marketing is all about introducing people to the tools of the company and allowing those tools to do the work to determine if the product, service, or opportunity is the right fit for them or not. 

If you approach it this way and without hyping the opportunity and you understand it is a long-term approach, it may be a great additional income without being restricted to a schedule.

Whether you become a full-time network marketer or not is up to you. 

The last thing you should know is that being an entrepreneur and building a network marketing business takes personal growth.

If you’re not ready to commit to investing in yourself and your skills, it may not be the best time for you to get started.

For many, network marketing is the gateway to being an entrepreneur and for that, we are very proud to represent the profession

Why Start A Network Marketing Business

Income isn’t the only benefit in network marketing.

We believe most people WOULD benefit from being in a network marketing company if only to experience the culture and witness how to build your tribe or following. 

You just may find out that once you get past some of the nuances, you may actually like it. 

The personal development, community, time freedom, impact, and fulfillment of helping others are all benefits I’ve enjoyed.

On top of that, network marketing is the lowest risk, lowest overhead way for MOST people to start a business.

Have you ever watched Shark Tank? 

You get a glimpse of what it takes to run a business. 

You’ll hear things like trademark attorney, supply chain management, commercial overhead, outsourcing, research, and development, etc. 

Well, you don’t need any of that to start a business as a network marketer.

How To Get Started & Succeed In Network Marketing

If you want to create success in network marketing, here’s a list of things that aren’t the determining factor:

  • The company
  • The product, or service
  • The timing
  • The compensation plan
  • Anything else external like that

Like any business, the key to getting started and succeeding in network marketing is by finding someone that can help guide you along the path to accomplishing your goals.

But above all else, success comes down to you and you alone.

What you put into building yourself as a person and in building your business, is exactly what you will get out of it.

I will tell you, one of the most important traits of network marketing top earners is being coachable.

There are many pitfalls most network marketers fall into, which is one of the reasons my wife Jessica and I started a community called Rank Makers.

What is Rank Makers?

Rank Makers is a “secret tribe” of sorts where network marketing entrepreneurs, like yourself, can learn and grow WITHOUT feeling discouraged or “put down” by so-called leaders and “trainers” who just don’t understand us.

This group is a SAFE place to learn, grow, and implement “field-tested” and proven social media & marketing strategies to grow your network marketing business.

Inside this group, you’ll discover a community of some of the most inspiring and uplifting entrepreneurs on the planet. 

Rank Makers help and support each other no matter what company they’re in. It’s in our DNA.

Our CORE mission and purpose is to help YOU and your team grow, thrive, and rank advance. 

You’ll find unique and fun opportunities, limited-time competitions, and training sessions to help you in your quest to hit that next rank.

And when you do, you can BET on it that we are going to celebrate, because, in Rank Makers, we celebrate your wins. 

When you rank advance or help another teammate rank advance, we’ll be among the first to recognize, celebrate, and cheer for you. 

After all, this is exactly what being a Rank Maker is all about.

When you decide to join a network marketing business and want to get started on the right foot, we will welcome you with open arms inside of Rank Makers!

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