*==============================================* M A S T E R N E T W O R K E R The Art of Building A Business by Professor Lon Lindsey MASTER NETWORKER #43 August 27,1997 *==============================================* INSIDE YOU WILL FIND: "The Art of Building A Business - "How To recognize legitimate MLM programs versus money games and pyramid schemes." The Archive of Master Networker Publications What's Hot Directory" Our weekly one liner. The humorous side. The Master Networker recommended business web page for the week - Do you know of anyone who could use a FREE five page website? Master Networker Recommended Readings ================================================== Hello fellow "Master Networker" subscribers! This is number Forty three in the Master Networker series. If you happened to miss the first forty-two publications, you can retrieve them at: http://masternetworker.com/mailfiles/mailfile.html or you can retrieve them by email from the auto-responder: MasterNetworker-issue-#.txt@masternetworker.com Substitute the desired issue number in place of the "#" Example: mailto:MasterNetworker-Issue26.txt@masternetworker.com or go to our webpage and click on previous articles. go to: http://www.masternetworker.com **************************************************************** I want to thank those people who sent me notes of encouragement and offered up prayers regarding my wife and I having to deal with her Mother and her Altzeimer situation. I was able to print out your comments and give them to Jan. They were a very good source of helping us move to the next level. Well, it finally happened! I just took my youngest to college . . .about 4 hours away so we now have an "empty nest." I tell people it's not too bad because my third child (my business) is still here. It really is an exciting time to see our children gradually spread their wings and allows my wife and I to spend more time with each other. I wrote today's article out of a need to help people distinguish what might be considered long term and what might be temporary. There are many "money game" type programs out there that look appealing . . .but the problem is they don't last long and in some cases might even be considered illegal. I'm not going to throw any rocks because I've actually participated in some . . . but in the end they confirmed what I am writing about . . . they just don't last and that's not good if we are working for our future as well as our present. ><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><> This is a reminder that the Master Networker series is purposely set up for the beginning networker or for those considering networking or even for networkers who have yet to be successful in networking. This means that The Master Networker series covers basic networking principles with the purpose of developing a firm foundation for networking. "The Master Networker" will be void of information that will thrust you to a $90,000 income within 90 days or a $15,000 monthly income without doing any work. Why? Because that isn't how networking works. I've been in networking for thirteen years, and I have yet to meet anyone who has obtained networking riches without working for it . . .especially $90,000 in ninety days. This series is about the real world of networking. <><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><> T H E A R T O F B U I L D I N G A B U S I N E S S H O W T O R E C O G N I Z E L E G I T I M A T E M L M P R O G R A M S F R O M M O N E Y G A M E S A N D P Y R A M I D S C H E M E S W H A T I S "M L M" . . . . . . M L M Vs N E T W O R K M A R K E T I N G! This article introduces you to the concept of network marketing and MLM (Multi-Level Marketing). Most people think the two are one in the same, but there really is a difference. Additionally, there are many uninformed people who throw in the word "pyramid" when they think and talk MLM and/or networking. By the time you finish reading this article, you will clearly be able to differentiate network marketing, MLM a pyramid scheme and a money game. Additionally, you will become knowledgeable in knowing what to look for when choosing a company you can feel good about representing. There is a difference between MLM (Multi-Level Marketing) and network marketing. MLM is done through a process of network marketing (networking), but network marketing does not have to be MLM. Let me explain. Multi-Level Marketing is a name that is used to designate how products are distributed and a payout plan that is based on more than one level. Some would argue that a two level payout plan is not considered multi-level and some would say anything more than a one level payout plan is considered multi-level. Others would say a two level marketing plan is considered, simply, bi-level and any plan that pays more than two levels is considered multi-level. You will also hear terms like "uni-level" which designates the pay plan as a one level payout plan (with modifications) or some unique extension of that. As far as I'm concerned, it really doesn't matter what we call it unless someone is trying to avoid using the "MLM" designation. Regardless whether the pay plan is uni-level, bi-level or multi-level, networking is considered the approach or strategy for building ones "multi-level" business, thus the term "network marketing" which encompasses all, be it uni-level, bi-level, multi-level or any of several take offs to what is considered traditional multi-level marketing. Why is "network marketing" considered the preferred approach to building a business? Because it's the smart way to build a business. It's what we call "working smarter rather than working harder". J. Paul Getty, the oil magnet, once said, "I would rather have 1% of the efforts of 100 people than 100% of one person." What he is saying is, he would rather teach one person and let that person teach one person and so on . . . . something we call "duplication" resulting in exponential business growth, creating exponentialgrowth and income potential. You see, there are two equalizers for all of us . . . death and time. Each of us has only 24 hours in a day . . .no matter who or what we are . . . therefore the business-minded entrepreneur knows how to leverage time! Instead of business-building results being based on one person over a period of 24 hours, it becomes possible to have numerous people working for you during that same 24 hour period. What's exciting is they are working for themselves as well, thus you are getting maximum return from that leverage. Do you want to know how powerful Multi-Level or network marketing is? Donald Trump recently on the Tonight Show was asked if he had it to do all over again, would he do anything any differently? His answer was "I would get involved in network marketing." That says a lot about the industry, doesn't it! Multi-Level Marketing, through a networking process, gives us the hope of building a huge business empire, through a process of duplication, resulting in huge incomes for the participants. That is the MLM part of "The Great American Dream" . . ."A Business For Everyone". Some will say, MLM has gotten a bad name and maybe a bad rap. If this is true, it's not because the theory of MLM is bad, it's because some marketers have used it and abused it in such a way that some participants have a bad taste left in their mouths from a MLM experience. Because of this, the term "network marketing" is now the preferred term to use and in many instances you will see ads that actually state "THIS IS NOT MLM" which sends a false message that MLM may not be good. I might add that if someone does have a bad taste left in their mouth due to a MLM experience, that does not necessarily mean the MLM program or company was bad; it could mean that the participant/sponsor did not know how to go about building a MLM business. The best suggestion I can give you is to research companies and choose a company that has a track record . . . a history of performance . . .a heritage and a picture of solidity with products that are quality and competitively prices. Also look for a good sponsor . . interview your potential sponsor. Beware of start-up companies! Statistics show that 80% of all start-up companies go "belly up" (out of business) within their first two years and of those that survive, only 20% make it to five years. Obviously the older the company, the better the odds that you will be building your future . . . not just your present. In the past couple years, I have seen many creative marketing plans that stay away from designating themselves as multi-level . . . plans like "Binary", "Australian", "Linear" and there may be others which I can't think of at the moment. Regardless of the name, they all use network marketing as the approach to building their business. How do I feel about Multi-Level/Network Marketing? I love it! I love the concept! I love what it can do! Multi-Level/Network Marketing can give a person hope! It can motivate a person to do things he/she thought he/she could never do! Multi-Level/Network Marketing can cause many sleepless nights because of one's own excitement. Multi-Level/Network Marketing creates a special bonding among other networkers/MLMers! Multi-Level/Network Marketing allows us the hope of "The Great American Dream" . . . Owning your own business! WHAT IS MLM? MLM (Multi-Level Marketing) is an efficient method of distributing a product and/or service to the end consumer. It is not a business itself. It is a WAY of doing business. It is a marketing method, and each person who buys/markets the products and/or services is a representative (distributor) of that company, not an employee. In other words, it is his/her own business. A representative (distributor) does not work FOR the company, but works WITH the company! MLM is the most powerful and effective marketing system in the world!! It is done via word-of-mouth recommendations. A representative (distributor) will buy/recommend a product/service to another individual, then that person buys/recommends the product/service and so on. This marketing method allows a representative (distributor) to recruit other representatives dDistributors) and then they do the same and so on. This allows you to acquire an organization of representatives (distributors). They are now in your "downline". You could end up with a large "downline" organization all buying/marketing products for the company you choose. You will receive a commission check from the sales of those representatives distributors) and they, in turn, will also receive a commission check from the sales of their "downline" organization. It is a perfect way for people to own their own home-based business as the industry is growing very rapidly! It presents you with a tremendous opportunity that's very exciting!! Traditionally, 80% of the cost of getting a product or service to the end consumer is marketing and distribution. The traditional way went through many sources--manufacturer to distributor to wholesaler to sales to retail and then to the end consumer. MLM companies eliminate wholesalers, high cost of advertising, having employees AND they deliver product or service to the end consumer. This greatly reduces the expense of getting the product or service sold. Increased profits are shared with the representatives (distributors). With MLM you can now have the benefits of a traditional business, but without the headaches. It is easy to get started and does not require a major investment. Receive a second paycheck without ever quitting your job. Some training is required, but it is less than running a fast-food chain. There are no special skills required and most MLM businesses are very duplicatable. You now have an income opportunity with very low risk AND can have a very high potential return. A new representative (distributor) of a MLM company can come in, turn the key, drive right off, and be in business! In most companies you get paid a salary for working a certain amount of hours. Although your job may give you a guaranteed income if you are salaried, what it really is doing is putting a limit on your time and how much you can make. Remember, your employer is making money off you based on what he is paying you for your time. Your employer has already figured out the "leverage of time" thing, but YOU are being taken advantage of if you are limited to what you can earn. That's not true in MLM. There are no limits exept what you limit yourself. In MLM you have the opportunity to earn a residual income. That's what attracts a lot of people to this business. There is no limit to what you can earn. Your income doesn't depend on you working a certain amount of hours. It depends on you helping and teaching others to duplicate what you're doing. That's it ... it's really just that simple! If you're motivated and willing to put in the time, effort and persistence needed to achieve your financial goals, MLM provides the opportunity and the vehicle to achieve those goals. Your growth and your rewards in this industry are limited only by your dreams, desires and commitment ... it's all up to you!! Your success depends upon how much support and help you provide for other people. The more you help people achieve everything they want -- the better the rewards! I always say, "if you help others achieve their goals and dreams, you automatically will achieve yours." A representative (distributor) of an MLM company, with a little consistent effort and by following a few basic principles over the course of a year or two, can earn a decent second income on a part-time basis ... perhaps you want extra spending money, a new car, pay your mortgage off quicker ... or you can go all out and achieve complete financial independence. Our "free enterprise" system allows you to be the best you can ever be ... and lets you help others be the best they'd like to be. It's really truly amazing! Can you imagine the feeling you'll receive knowing you've helped so many people achieve what they've wanted. Incredible!! WHAT CAN MLM OFFER YOU? MLM provides a fantastic opportunity for you! The beauty of MLM is it is given to us all equally. What we do with that opportunity makes the difference! We can earn a little, or we can work hard for the first year or two and earn a very decent income. The choice is yours!! You choose whom you want to work with and what the hours or days should be. You choose whether you work from home, an office or while traveling. You choose if you want to work person-to-person, use mailers, use the phone or work with small or large groups of people and now you can choose to build your business with the help of the Internet. This is your business and every aspect of your business is up to you -- it's your choice! Some key ingredients in this industry are to be enthusiastic, positive and involved! Once you understand the unlimited potential of MLM, you'll soon begin to discover your dreams and desires. Perhaps you haven't allowed yourself to ever consider these dreams. No matter how small or large your dream is, if you really believe in it and are willing to put forth consistent effort, you can and will succeed! . . . and if you have a passion for your chosen business, it will happen faster than what you might imagine! As said by Walt Disney "All our dreams can come true IF we have the courage to pursue them." THE CONCEPT OF DUPLICATION MLM is based on the concept of duplication. Once you join an MLM company you personally use or distribute the MLM company's products. You also recruit other representatives (distributors). They are theplaced in your "downline" sales organization. They, in turn, use or distribute products plus they recruit other Representatives (Distributors). In other words, they, in turn, duplicate you. You can recruit/sponsor as many people as you like. A MLM company will pay you a commission check on the sales made by anyone you refer or recruit and it can be many levels deep. The more you recruit the greater your commission check will be. You are paid commissions on the sales volume of your "downline" organizations and depending on how hard you work ... you could have a lot of people in your "downline" organization. Remember, even though you are getting paid commissions based on the sale of product in your organization, you are really getting paid for TRAINING . . and it is these two points that separates MLM it from a pyramid scheme or money game. You receive a commission check that is based on a compensation plan. This plan should motivate a representative to use and retail the product/service, recruit other individuals into the business and should also make them want to train and help their downline organizations grow. Compensation plans vary so research this when looking for a business opportunity. CHOOSE A LEGALLY SOUND COMPANY If you can find a company and business/compensation plan that DOESN'T REQUIRE you to purchase products to qualify for commissions, that is the best and most legally sound compensation plan you can have. Now, obviously if people don't purchase or retail products, no commissions are generated so I'm not proposing that no one purchase products. In fact, it should be the opposite. The products should be so good . . so appealing . . .of such high quality . . . competitively priced . . . be able to replace currently used products that you already purchase so that you LOVE the idea of purchasing products from yourself! It's like taking out stock in your own company. In fact, with the right company and by your utilizing your ability to purchase from yourself at wholesale, you should be saving money . . with the ability to make money! That is why I caution people who are looking at companies that require a certain amount of purchases each month. I've seen many companies that require purchases of $100 - $300 monthly just to qualify for monthly commissions. I need to caution you regarding this as well. That tends to encourage the purchase of unwanted product and actually leads to a phenomon called "distributor dropout." I have seen huge organizations with huge numbers of dropouts . . .simply because they didn't believe enough in the products and couldn't justify purcahsing a certain amount each month. They were purchasing products for the wrong reason! Of late, there seems to be more government scrutiny of companies that are requiring monthly purchases to qualify for commission. There is an indication that this policy may be headed to the courts . . . so be on the guard for that. There is something else I need to caution you about. Some companies pay on what is called "CV" (consumer volume) or "SV" (sales volume). This is even worse than having to purchase $100.00 of product monthly. "CV" or "SV" is a percentage of the wholesale or retail cost. So, if the compensation plan states you are receiving . . .let's say . . .15% commission . . .you can bet that is on the "CV" or "SV" which means you are NOT getting a 15% commission. I know one company that pays a nice commission percentage, but the $100 CV distributors have to spend to qualify really translates into a $115.00 in actual money. That makes the actual percentage 13%, but most people don't catch that until they've been invovled for sometime. The answer to the above is to find a company that pays commissions based on the retail price of the products. Not only will you get your products at wholesale, but you are paid commissions based on the retail price of the products . . .and that includes what is purchased by your downline members. So, if you can find a company that pays commissions based on retail prices AND does not have a "CV" or "SV" policy, you are then getting REAL commissions based on product sales. There are very few companies that offer this and fortunately I am connected to one such company. There is another bonus available with the company I am associated with. They include business-builders supplies and literature in your group volume for the purpose of computing commissions. Although they don't pay you commissions on business builder supplies sold, increased volume forces you higher on the commission scale chart . . thus higher commissions on consumable products sold throughout your organization. This feature is extremely rare and may not be available in any other company other than my FEEL GOOD company. Another thing you will want to avoid is warehousing. This is where the company allows you to "buy in" at certain levels . . .thus creating an unwanted inventory of products. This is usually called garage or basement warehousing because that is where the products end up . . .and seem to stay. Government officials have actively come down on these companies so I would completely avoid any company that suggest you purchase a certain amount of product just to reach another level. WANT SUCCESS IN MLM? HERE IT IS! 1. Bond to the products! 2. Bond to the company! 3. Bond to your upline! The rest will fall into place because you did those three things. AVOID PYRAMID SCHEMES AND MONEY GAMES Pyramid schemes are illegal and money games are short lived! That is the long and short of it! How can you recognize a pyramid scheme when you see one? If you are paid to recruit or sponsor others into the business, it is considered a pyramid. Commissions must be based on only the sale of product and not on the act of sponsoring. In a pyramid, you have a distinct advantge being on top . .thus the pyramid. In a pyramid, your downline cannot pass you in earnings, but in a legitimate MLM business, you have the opporunity to by-pass your upline. You truly are at the top of your own business! A money game is most recognizable by the appearance of how it comes to you. It could be a chain letter or more commonly a list of 5 or 6 or 10 people's names and addresses asking you to send money or stamps to all those listed. For some, there will be a monitor who becomes the central source. It may appear as a "birthday club" or "recipe club" or some other creative attempt to disguise the chain letter/money game mentality and reality. Just remember, chain letters and money games are illegal and eventually go by the wayside. Don't be shocked when you are notified by a government agency that you are participating in a chain letter or money game and asked to sign that you will no longer participate. The postal department defines a program as a lottery when these components are in it: (1) prize; (2) consideration; and (3)chance. What this basically means is if you have to pay money to earn money with only a chance that you might get the money, it is deemed a "lottery" and is illegal to mail. For a complete report on what makes MLM Legal, see my "Choosing A Business That Is Legal . . .The Legality Test" article. Lon Lindsey Master Networker ************************************************************************ How would you like to be the only representative from your business opportunity to be listed in this "What's Hot" Directory. Explode your opportunity by registering and setting up a web page today. Visit: The American Dream Network, Inc. http://www.munymaker.com **************************************************** This week's one liner ---------------------------------- This isn't Hell, but you can see it from here. ========================================================= The Humorous Side - Joe, a member of a nudist colony, was trying to get John to spend a weekend there. John finally decided to go. At the end of the stay, Joe asked John what he liked most about the camp. After thinking it over for a few minutes, John answered, "Oh gosh, it just had to be those terrific cane bottom chairs." ****************************************************** >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Website of the week: The company "The Master Networker Elite Team" supports: http://www.masternetworker.com/watkins/ >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Master Networker Recommended Readings: BOOKS WAVE Three - Richard Poe Money, Money, Money, Money, Money - John Milton Fogg The Future Is Knowing Network Marketing - Patrick W. Higgins Who Stole The American Dream? - Burke Hedges Working Smarter From Home: A Guide For Network Marketers - Crisp Paul J. Meyer & The Art of Giving - John Edmund Haggai The One Minute Sales Person Did Your Well Before You Get Thirsty - Harvy MacKay Live Your Dream - Les Brown Successful Network Marketing For The 21st. Century - Rod Nichols How to Make Big Money in Multi-Level Marketing - David Roller Publications Bad Blues - Venus Andrecht The Network Marketer's Guide to Success - Jeffrey Babener & David Stewart How To Succeed in Your Own MLM Business - Debbi A. Ballard How Secure if Your Financial Future?- Allen Baytes Beyond The Veil - Leonard Clements Network Marketing: The Business of the 90's - Crisp Publications Tax Advantages of HOme-Based Businesses - Carol Dilley A Better Way to a Better Life - Nancy Failla & Jerry James The Basics - Don Failla The Greatest Networker in the World - John Milton Fogg MLM Special Reports - Randy Gage You Can't Steal Second With Your Foot On First - Burke Hedges Beingthe Best You Can Be - John Kalench Mail Order MLM Techniques - Charles Possick Big Al Tells All - Tom "big Al" Schreiter How to Create A Recruiting Explosion - Tom Schreiter Power Multi-Level Marketing - Mark & Renee Reid Yarnell Winning the Greatest Game of All - Randy Ward Are You Walking Past A Fortune?- Tom "Big Al" Schreiter MAGAZINES * Cutting Edge Opportunities 59 Crimson Lane Elizabethtown, PA 17022 717-361-9007 717-361-0860 Fax 800-786-5493 code #195 --->>> FREE Trial Subscription * Emerald Coast News P.O. Box 190 Niceville, FL 32588 904-564-3004 904-863-5315 Fax http://multi-level.com/ECNews/ --->>> FREE Trial Subscription * Money N'Profits Magazine (United Communications Co.) 28 Vesey Street, #242 New York, NY 10007-2956 212-785-9080 212-785-8007 Fax * The Network Trainer P.O. Box 57723 Webster, TX 77598 713-280-9800 713-486-0549 Fax * Upline 30 East Main Street #210 Charlottesville, VA 22901 804-979-4427 804-979-1602 Fax * Profit Now (formerly MarketWave) PO Box 4245 Barboursville, WV 25504-4245 Money N Profits Entrepreneur Magazine Success Magazine ------------------------------------------------------------- Any suggestions for Master Networker article ideas? Submit to: professor@multi-level.com Remember, on the internet, it's not only who you know and what you know, but also WHERE YOU GO! See you there! Professor Lindsey If you want to unsubscribe from "The Master Networker" send e-mail to professor@multi-level.com and put unsubscribe in subject area.