Network MarketingNetwork marketing (MLM or Multi Level Marketing) has been around with us since the 1960’s, but for various reasons quite a few myths still abound.

 

Some myths are positive, trying to enhance the reputation of network marketing, and others negative, portraying it in a bad light.

 

One of the myths most often quoted by network marketing distributors is that network marketing is taught at Harvard University.  There is no truth in this statement and it reportedly erroneously stems from an article written by Beverly Nadler during the 1980’s.

 

The popularity of this myth hinges on the fact that initially network marketing was viewed very suspiciously by the majority of people.  Thus, network marketers loved it because it confirmed to them that they were in a respectable industry, and prospects’ fears were somewhat allayed by the association with a prestigious academic institution.  It seems that for network marketing to be accepted in the business world as a legitimate industry, an academic stamp of approval was required.

 

But the network marketing has matured through the years and is now an established industry worldwide.  Studies by the Direct Selling Association indicates that direct sales (of which include network marketing) exceeds $80 billion worldwide, while 1 in 10 of US households are in some way involved in direct sales.

 

So why is network marketing not taught at academic institution.  This is because staff at these institutions is academics and not business people.  Academics are very wary of anything non-traditional, and don’t want to risk their, or their institution’s reputation.

 

The situation is changing though, with academics like Dr Charles King (Harvard trained) appearing and supporting network marketing on well know marketer Tim Sales’ video “Brilliant Compensation”.

 

Another “Harvard report” is touted as containing the following criteria for joining a network marketing opportunity:

 

1.  The network marketing company should be in existence for a period exceeding 18 months. Most companies that fail do so within this period.

 

2.  The company must have a product that is unique (not available in retail stores) and highly consumable (repeated purchases by customers).

 

3.  The total number of distributors in a country must be less the 0.5% of the population.  For the US this figure is about 1.5 million.

 

I cannot the original report and the truth thereof is thus debatable as I see it.  Although the points seem to make sense, it could be argued that sometimes points 1 and 3 would contradict.  It could be very advantageous joining a young company.  I think one has to look at the leaders involved and how the company is structured. Homework to be done, but sometimes one has to take a leap of faith.  Some existing and very successful top tier companies (where there is a substantial initial investment to join and no, or little, repeat sales) refute the second point.

 

Another myth circulating in Mary Kay circles is the Harvard is teaching the company’s marketing plan. This is not true. Harvard publishes case studies on various companies, amongst them Mary Kay, but that is as far as it goes.

 

Yet another myth widely quote is that most existing millionaires (at least in the US) made their fortunes through network marketing.  While there definitely are many network marketing millionaires, most millionaires today own large successful companies, or made their fortunes though profitable real estate deals, or are executives with profit sharing at large, usually multinational, companies.

 

We are also led to believe that Donald Trump said he would do network marketing if he had to start again.  While it is true that Donald Trump owns his own network marketing company, the Trump Network, such a statement is disputed.

 

I left this one for last. Network marketing is a pyramid or Ponzi scheme.  Haven’t we all heard that one!  The only similarity between network marketing and the other dubious schemes is that all of them use multi level income structures. The difference is that with the other schemes (or scams), no product or service involved and one makes money solely by enrolling new members.

 

I hope that this has cleared up some of the network marketing myths.

 

To your successful network marketing business!

 

Johan

 

Quote for the day:

 We are all inventors, each sailing out on a voyage of
discovery, guided each by a private chart, of which there is
no duplicate. The world is all gates, all opportunities.”
— Ralph Waldo Emerson

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  2. Network Marketing And The Power Of Leverage

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