Network Marketing Is A Legitimate Home Based Business?

I can’t count how many conversations I’ve had with people regarding whether network marketing is a legitimate home based business.  Although these conversations were obviously with my cold market, they were interesting nonetheless.

Usually I find that most people when approached just don’t have any concept of what a “business” is period, meaning this:  they have drafted up in their subconscious minds what they want their business to look like.  This vision usually revolves around having to do a whole lot of nothing, with eager customers flooding their doorsteps handing them money.

Sadly enough, first time business owners take this same philosophy even when opening up public franchises.  I’ve interviewed owners of smoothie shops that seriously thought customers would just mow through their doors in droves when they first opened, only to find out frustratingly that they actually had to utilize “old fashioned” marketing techniques just to keep their store from going under.

Let me give you an example first hand.

My last one-on-one went something along the lines of this (after he decided network marketing was not up his ally because it involved understanding sales):

Me:  So Joe, if you don’t mind me asking, what does any business try to do?

Joe:  (after long pause)  Make money?

Me:  I agree.  So how do they do that?

Joe:  (with a resounding sigh) I guess they have to sell something.

Me:  More specifically, they have to provide a product or service that the consuming public is willing to pay money for, while maintaining a positive return on investment.  I don’t want to rain on your parade Joe, but you’re going to have to “go after it” if you want any kind of business success in your life.

That’s the way the world is.  And it separates the people too scared to do anything from the ones that actually WILL do something.

After this little analogy I could see poor Joe’s defeated look.  I wasn’t upset with him, but I understood the reason for it.  Most people just don’t bother to think what the cost is of running a business, both financially, emotionally, physically, and mentally.

And keep in mind, Joe already told me that he believed owning a business was the ONLY way to get ahead financially in this world, and that a job would NEVER get him to where his family deserved.

Joe initially wasn’t able to put the pieces of the puzzle together; that in order to foster a long-term residual income he was going to have to face people either in person or on the phone.  And that scared Joe to death.

You see, when we make decisions as human beings we tend to make them to either avoid pain, or seek pleasure.  Spending money, in general, produces pain for most people right?  I mean, we’d rather not spend any money if we didn’t have to, so it’s a pain point.  This means that in order to pull that wallet out, we have to be convinced 100% in our own minds that “thing” we’re buying is going to provide us more pleasure than the pain (in dollars) we feel.

I know I got on a rant, but I felt it was important to discuss the concept of “business ownership” in general before delving into the topic of what makes network marketing a legitimate home based business.

Let’s look at this subject from a marketing standpoint shall we?  In advanced marketing something called a S.W.O.T. analysis is used to determine whether or not a business concept is worth pursuing.  S.W.O.T. simply stands for Strengths, Weaknesses, Opportunities, and Threats.  Below I’ve summarized what I feel is a fair shot at a S.W.O.T. chart when comparing a traditional public franchise (like say a McDonalds), versus a private franchise (any network marketing company).

PUBLIC Opportunities Threats
Strengths Strong brand name recognition Other competitors with similar brands in same market fighting for market share
Opportunity to open more chain stores if performance is strong Usually plenty of market share to go around
Weaknesses Must hire employees Lawsuit potential due to huge financial backing
Huge up front costs to start Business usually hinged on economy, no demand margins
No time leverage
PRIVATE (NWM) Opportunities Threats
Strengths Minimum starting costs Competing with 100 other NWM companies for same cold market
Time leverage Usually no brand name recognition (sometimes negative)
No employees
Can manage part time
Weaknesses Market awareness of business model is weak or misunderstood Sharks can snatch reps from other companies
Marketing training typically does not meet the needs of the distributors / business owners Companies with short track records have gone under, leaving thousands of business owner without a paycheck

In my professional opinion, the strength section alone warrants the private sector over the public one.  But then again I am biased from speaking with so many owners of failed public ventures.  I’ve also heard my fair share of network marketing failures, however the financial cost of these failures is nil to none.

In addition to the marketing analysis above, I’d also like to mention that network marketing has been around for the better part of 50 years.  It is absolutely a legitimate home based business, or the federal government would have shut it down long ago.  Pyramid schemes (as people sometimes refer to network marketing opportunities) revolve around a business model where cash flows through it with no real movement of product or service.

This industry operates on the flow of TANGIBLE goods.  It’s pretty simple, you can either promote a product or service that already exists, or create your own.  Those of us that love and utilize the network marketing industry have just chosen the first option.  It’s that simple.

To Your Trials & Success

Author : Jason Lee

Jason Lee is a 34 year-old aspiring entrepreneur from the Great Northwest state of Washington who strives to make the internet a better place for everyone involved in MLM.

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Posted on June 20, 2013, in Bussiness, MLM and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. yes this is a good way to make some money and be at home at the same time, but i have also found affiliate marketing beneficial as well they both work great it just depends on a individuals preferences on how they want to go about doing business. both are a great way to accomplish making money

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