The Network Marketing Business Model – Is it a Good Choice For a Home Based Business?

In an era of Corporate mergers, rising gas prices, takeovers and downsizing, so many people are looking to become home based business owners- for good reason. They can also hold the title of “home based independent business associates” or “marketing distributors”. The bottom line is that an increasing number of people are looking to work from home, they do it to take control of their life rather than being at the mercy of a boss or an unstable market place. That desire follows an active research for the right business which means looking at various models which will invariably expose the researcher to a common business distribution channel; Network Marketing.

It’s a model that is very beneficial for both the Corporation and the Marketers. The Corporation does not employ the marketing force and therefore can deploy some of those savings to a very interesting and appealing commission structure for their Independent home based business marketers. The marketers, from their stand point, will benefit from a very low cost to start a home based business where all the homework has been done.

A home based representative of a network marketing company will have the financial benefit of not having to worry about market research, product development, manufacturing, licensing, product positioning or branding, to name a few time consuming and expensive requirements in starting any business. Rather than creating a business from the ground up, they can enter an established and systematized structure where often advanced training and support systems are provided by their chosen head office-and can be off to a fast start with minimal experience required. It is to the corporation’s advantage to guide and train the marketing force because they are the individuals doing the front end work which leverages their effort in meeting their sales targets. This same leverage is not only beneficial to the company but also for each marketer because in addition to participating in product sales, they will also be rewarded in helping develop the “Network” of marketers. Any marketer who sponsors another will normally benefit from the efforts of that marketer in one form or another depending on the compensation plan designed by the corporation.

In fact that compensation plan is meticulously designed by the corporation in an effort to make their business model the chosen one in a field where many home based business models are competing with each other. There is ample choice and this is much to the advantage of the potential home business owner because it invites a corporation to offer appealing benefits in order to attract and retain their marketers.

So what should home business seekers look for when performing their due diligence?

– Make sure you’re dealing with a corporation and not an association of entrepreneurs. The corporation is responsible and accountable for the product/service, so any licenses or permits are their responsibility as well as any liabilities. You represent what they have to offer and therefore are more or less an extension of them, somewhat like a marketing arm or independent contractor. Look for a true corporate structure and chain of command and accountability- who is the Chief Executive Officer, President, any Vice-Presidents etc. Who looks after the products/services, support, training, technology, research & development. A corporate structure is readily available and describes everybody’s responsibilities in the structure, and you as an independent marketer of products/services will know who to contact should you require assistance.

– Look for a systematized approach. Most home business seekers have no previous business experience and therefore need to rely on an established method of operation which accounts for minimal experience.

– Look for support so that you are guided and trained in your start-up efforts. The system may be aided by technology which reduces the learning however you still need to learn the system because there will be work involved. This is called sweat equity.

– Look at all the steps you are going through and the interaction you’re having with the person that introduces you to the business and remember that you will be performing the same actions to run your business. That’s a great way to evaluate if you can and want to do the same thing. That is what leads us into duplicability. You need to be able to do what your sponsor is doing and the people you sponsor must be able to do what you do. In order to cater to the majority of people, this duplicability occurs with a minimal skill set to begin with, the system should compensate for the lack of skills and experience although you will develop some along the way through sweat equity.

In conclusion, Network Marketing is a win-win situation between the corporation and the marketing force. The corporate structure will show you who looks after the direction, development, marketing, technology and support of the business you’re considering starting. Once you see yourself in this business, make sure that you can rely on a system, you have thorough support and that you can leverage your efforts through duplicability. We haven’t touched on products or services here but that would be another subject all together.

For answers to any questions, please feel welcome to contact me–

Pierre Trudeau