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Referral Marketing Explained....

Referral Marketing is a form of Network Marketing in which a company promotes its product line not through the traditional methods of paid advertising but via independent distributors and their word of mouth advertising. But Referral Marketing differs in design from traditional network marketing because in the latter you might have to stock product or inventory to show or sell to others in order to receive a check.  While in Referral Marketing you do not.

There is cost savings to the company going this route and a higher brand loyalty than using paid advertisements. Independent distributors benefit by receiving commission on direct sale of the product and by creating a network of independent distributors who also promote the product line. The network commissions are paid out in bonuses and overrides and the income source can come from many levels deep in the network.

Everyone is a natural network marketer because when we enjoyed a good movie, purchased an item we like or attended an event we enjoyed. We automatically start talking with enthusiasm about it when someone mention the movie, item or event in our presents.  Which in most cases causes the person who you mention the information too; to want to look into seeing the movie, buying the item or attending the event. But did you received some form of payment for your natural word of mouth marketing?  No.

Being a paid network marketer using the same natural skills with a few changes to how they get to review the information. You would receive income from each word of mouth contact who look into and watched the movie, purchased an item or attended an event.

Independent Distributor Benefits

From an independent distributor standpoint besides what was mentioned above, network marketing is a method we use to helps us take charge of our lives rather than our life taking charge of us via a regular JOB (JOB = Just Over Broke) and have the financial freedom to live the lifestyle we choose without having the need for a regular job.

In fact here is the answer below to the question: What is a network marketer?

"I am an independent distributor of products and services that I personally use and enjoy. I also help anyone who is interested develop a happier and more rewarding lifestyle for themselves and be in a position to retire in a realistic time frame of 5 - 10 years as against a time frame of 20 - 30 years which in most cases today means never because the person do not have an retirement nest egg. So in 1 phrase I am a lifestyle changer. I show people an avenue to obtain the lifestyle they have created for themselves in their dreams and wishes using network marketing as the vehicle."

Network Marketing is not like a traditional business and should not be treated as one.  But it entails sharing, having fun with your family, friends and business partners, personal development, and helping others to achieve their own goals and success.

One of the greatest joys I have experienced working from home is the ability to plan my day around a schedule I decide instead of around a schedule that my present JOB decide.

I also remember a special moment when I started working my business full time from home and I was needed because one of my kids went to school and took in sick. I was able to stop what I was doing and go for them right away without having to ask my boss for time off, and did not suffer the possibility of lose wages in the process.

Internet marketing, social media and any other form of advertisement that does not involve sitting down with someone and reviewing information is not network marketing.

Network Marketing is and will always be a person to person relationship building business with many benefits including saving money on your taxes and the ability to build a true retirement nest egg.

A person can start their business on a shoe string budget part time and turn that business into a (7) figure income working full time.

What Network Marketing can do

You can duplicate your efforts many times over using Network Marketing. For example, letís say you wanted to earn an extra $1,000.00 a month. It would mean that you would have to increase your work hours by say 15, 20 hours or more a week, get a second job or win money.

But is it possible to this?  Maybe it is or maybe not. You also stand the chance of paying more taxes because you are in a higher income tax bracket.

Network Marketing is better

In network marketing, you get to save on your taxes because you get to write off at least 50% of expenses incurred to generate business. To earn an extra $1,000.00 a month in Network Marketing you do not have to work 15 or 20 hours more.

Here's how......

Let us say, you put in only 1 hour a day or 5 hours a week into your business just working 5 days a week, and your effort earns you only $200.00 a month profit. And let us also say that for each independent distributor you or your network develop, you earn a commission on their sales. In most network marketing companies, commission is pay at different levels. So 1st level 25%, 2nd level 10% and 3rd level 5%

For my example let's say you start with only (5) 1st level distributors, who develop only (5) distributors each. You would only have to develop a network of only 30 independent distributors who each develop just $220.00 a month in sales on average to earn you $800.00 in commission plus your $200.00 = $1,000.00 a month.

Level (1) = 5 x $240.00 x 25% = $300.00

Level (2) = 25 x 200 x 10%= $500.00

$200.00 from you + commission from your network of $800.00 = $1,000.00

You only contributed 5 hours a week of effort to your own business but your network produced 150 hours a week of effort if each person in your network did the same amount of time and effort you did and only contributed 5 hours per week. This is called The Duplicating Effort Method. It is a more effect way to earn an income per month without having to do strenuous extra work.

As your network sales increase or some of your network distributors produce more sales than $220.00 a month. You earn more money, but your effort remains the same or even get less until you reach a level where you are earning more than 3 or 4 times what you earn at your regular job, constantly for 6 months and at this point, most people retire from their job, work their business full time and live a lifestyle only dreamt about by others who are hoping to win money or one day become the president of the company.

Of course this is just a small example of the great potential of Network Marketing and it is also a level playing field for everyone meaning there is no employer / employee relationship and everyone in your network can do the same thing you did or more.

It is each person's own business and everyone at the bottom has their own chance of going to the top and becoming a president of their own business and earning a president income without the hassle attach to traditional business.

 Do you have job security

Your success and the success of the whole entire network is helpful to everyone involved and not the other way around like in traditional business where everyone is working for the person at the top with little benefit back to them and their job is not secure because they can be fire or laid off at any time.    

Network Marketing is a win win deal for everyone. It is better because you are your own boss and cannot be fired or laid off, you set your own hours without the 9 - 5 constraints, you can earn a tremendous residual income, and live a happier and more rewarding lifestyle. It is also a legal way of conducting business.

Network Marketing Secrets

The (6) secrets to success in network marketing are:

  1. Understand well the network marketing concept.

  2. Use the product/service and develop your own enthusiasm for it.

  3. Learn simple steps to promote your business around the network marketing formula.

  4. Develop a network of independent distributors like yourself.

  5. Teach people how to split their time between business and pleasure.

  6. Form lasting friendships base on trust, honesty and having fun together.

When you start to build a network marketing team; your focus at first should be local development and only go globally when you are in a position to spend at least (3) months in the new area showing your team how network marketing development is done.

Do you want further proof......

Please view the following link below which is a 20 minutes video. It is not the newest video and some of the channels of distribution mentioned is now discontinued. But the basic information about network marketing still applies and it gives you a very good understanding of this industry.


Video message for further understanding of Network Marketing

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