The Social Network

Previously on Trucker John's Prosperity Convoy, I told you that in order to secure ample retirement income for yourself, you need to build passive income. And your best bet is through Network Marketing, a.k.a. Multi-Level Marketing. In this episode, I'm going to tell you just what Network Marketing is, what it is not, and how it can be even better than you ever would hope.

Let me start with what Network Marketing is not. (As an aside here, I'm going to use the abbreviation "MLM" for Multi-Level Marketing from here on out in this post instead of typing out either whole name for this business form.) It is NOT a pyramid scheme, as many would have you believe. Well, OK, the good, legitimate MLM companies are not, though I'm sure there are some bad, illegitimate ones that may well be pyramid schemes.

In a true pyramid scheme, the operator takes the money ponied up by the people entering the bottom of the pyramid to pay off the people at the top. Think of Bernie Madoff's modus operandi for the prime example. A legitimate MLM sells products and/or services to generate the income that gets distributed to its representatives. If nobody buys the products, nobody gets paid. It's as simple as that. But what exactly is an MLM, and why do people think they are pyramid schemes?

The business model of an MLM is to have independent representatives ("reps") make up its sales force, rather than hiring a sales staff and paying advertising costs, and so forth. The reps go out among their family, friends, and people they meet and sell not only the MLM parent company's products, but the MLM rep opportunity as well. (That's where the confusion with a "pyramid scheme" comes in.) The MLM then pays the rep commissions on her sales. But to reward the reps for bringing in more reps (and, it follows, more sales), the MLM also pays each rep commissions on the sales made by the reps she brought in, as well as those made by the reps her reps brought in, and so on down the line. With no limits on the amount of customers a rep can sell to, and no limit on the number of reps she can bring into her "downline" those commissions can add up to a healthy income. But a good MLM can be much, much more for its reps.

Besides providing the goods or services to sell, a good MLM will also provide all of the training, marketing materials, and support a rep will need. It will foster a culture of community, in which each member of the MLM, from the people working at the parent company down through reps at all levels, truly wants each rep to succeed, and will help out to make that happen.

So consider that business model, and compare it to that of a "traditional" company. In the traditional company, you have a CEO on top, then layers of "lesser" employees below, with each successive layer wider than the one above. Sound like a pyramid to you? And do the employees at each level truly want the other employees to succeed, other than to do their jobs well so the company can profit and they can keep their jobs? And can employees at these types of companies give themselves raises by going out and finding more customers and more employees? In the immortal words of Al Borland, I don't think so, Tim.

Those are the MLM pros and cons in a nutshell. Oh wait, I didn't give any cons. Let me add them here:

• Individual results may vary
• The rep's results are a direct result of his/her efforts
• It may take some time to build up a customer base and downline sufficient to provide a healthy income stream
• You do have to sell some products in order to succeed
• There is usually a "buy-in" cost to become a rep, and it may seem a little steep to the newcomer (but in the long run, if the rep is successful, it will seem like peanuts).

That's all I can think of as far as cons go. Not too terrible, eh, if you find an MLM whose products and opportunity excite you.

Speaking of which, I have found that MLM that excites me, but I'm not going to promote it on this site. (If you are one of my friends, you may be hearing from me soon, though.) Many excellent MLMs do exist "out there", and I urge you to do some research to find the one that best suits your interests. The model really does work; I know a few successful MLM reps personally--and know of many others--who don't have to work "real" jobs because their MLM income is enough to give them financial freedom. And many hugely successful people say that if they had to start over from broke, they'd start out in an MLM. Donald Trump is one who comes to mind. (No matter what you think of him as personally or politically, you gotta' admit he knows business.)

So there you have Part 2 of how to build a secure financial future. Thanks once again for taking a peek at what I have to say. Comments are welcome and encouraged, as always. I can't wait to see you along side me on the road to prosperity.