Network marketing has always been with us. Most likely the majority of us know about this. People who are engaged in it call it a business and it is, if you go by the simple definition of business as work related to the production, selling or buying of goods or services. This is a business wherein you don't have to put up your own company or a store to sell products or services. Network marketers don't necessarily sell. They earn big not by selling but by buiding a network of people who want to earn big just like them. If you join network marketing and you want to sell, fine. But selling won't make you earn much.
Most network marketing companies are into products that we need in our daily life - shampoo, soap, beauty care products, food sumplements and many others. You cannot earn P100,000 a month by selling these products by yourself. That would be selling about P1 million worth of goods, if you go by a 10-percent profit margin. Many network marketers earn that much - and even more - by building networks of people who sell a little and consume a little. In a nutshell, the work requires inviting or recruiting friends, acquaintances or even complete strangers you may met for the first time to join you in the business or your network. Your invitees are referred to as your downlines.
You will earn commissions from the total sale or consumption of your downline networks. The total sale of each network is given a percentage point. For example, a network sale of P100,000 is computed to be at 15 percent. If you have five downline networks with P100,000 sale each month, your total sales will be worth P500,000, say, may be given a 21 percent commission. The 21 will not go to you because your downlines will have their own shares. Your earnings will be the difference between 21 percent and 15 percent or six percent of P500,000. That would be P30,000 commission for you. It goes without saying that the bigger is your total sales, the bigger is your commission, unless you will build just one network which will eat up your commission.
I know this from experience. In the late 1980's I was involved in network marketing with Barclays International, a Filipino networking company owned by the Bonifacio family, in Manila. It was at a time when I wanted to get out of employment, although I was working with the British new agency Reuters which paid very well. It was when a new Manila bureau chief came in and I feel the heat in the office. I was an escapist and, instead of solving my problems, when I felt the heat my tendency was to get out. Probably because at that time I could afford to lose a job, I was single and had no family to care about.
Now, going back to network marketing. At Barclays, I avoided selling, unless some friends asked for some products. I just consumed because I could not escape it, especially when I started getting my paychecks which I would forfeit if I did not buy at least P250 worth of goods every month. Since I was receiving an average of P10,000 monthly commission, I had to consume. I avoided selling as I could not imagine myself, a journalist, selling shampoo or cologne. But there were times when I could not avoid selling when some lady journalists like Barbara Mae Dacanay wanted a cologne, one of Barclays fast-selling items.
I mentioned Barbara Mae Dacanay, who was then the Manila bureau chief of the Dubai-based Gulf News and a good friend, because, while writing this part of the article, I remembered one of our dialogues when she came to know that I was involved in network marketing with Barclays. Here's the dialogue, as far as I can remember.
BMD: Cas, pabili naman ako ng cologne ninyo. Nabentahan ako minsan sa office, nagustohan ko siya (the cologne, not the seller), pero hindi na siya bumalik. (Cas, I want to buy your cologne. Someone sold me one at the office, I liked it but she did not come back).
Me: Barang hindi ako nagbebenta, nagni-network lang ako (Barang, I am not involved in selling, I just do networking).
BMD: Ikaw naman, pumupunta ka naman sa Barclays, di ba? Pagpunta mo di ibili mo ako (Come on, you go to Barclays, right? When you go there, buy me one).
From then on, I had to stock Barclays cologne at home.
Yes, that's true, in network marketing you will earn even if you don't sell. But a word of caution: Network marketing is not an easy business. It's hard work and can be frustrating, particularly if you don't have a very persuasive or strong personality. You will find out that it's difficult to get even your friends to join you, particularly if your friends have an "image" to protect. (As they call it in network marketing, may dating pero walang datung). I am not persuasive, but I found a way on how to do it: put ads with Manila Bulletin for a seminar on business that required no selling and where the speakers could mesmerize you into joining.
Although I got only five or seven strong networkers as direct downlines, my total downlines grew to more than a thousand people, sellers and consumers alike. Nanganak nang nanganak, (they grow or multiple) as they say it in network marketing. They were recruited by the layers of downlines in my network. I quit network marketing when newspaper ads became ineffective and the attendees thinned out from the usual 100s to 10 and later even one or two, and one strong downline broke away from my network when his own network reached the maximum 21 percent sale for three consecutive months.
I was supposed to get 2 percent from the total sale of his network in keeping with Barclays policy. But when my total network sales dropped to below 15 percentage point, I lost my 2 percent commission from his network. It was Barclays policy to give a networker a 2-percent commission from his breakaways, but you have to maintain your sales at 15 percentage point or more. I felt bad when I lost that 2 percent commission and later quiit. In nearwork marketing, your network does not die immediately even if you stop recruiting. So I kept on taking my monthly commission until it slowly dwindled down.
There is money in network marketing, but you really have to work hard or at least find a way to rise in the network ladder. I earned from Barclays much more than what I spent for the ads. The perimeter fence of my house in Bacoor, Cavite, was courtesy of Barclays.
A few years later, I discovered that our commissions in Barclays, from where some earned P50,000 to P70,000 monthly, were peanuts or small time. In Forever Living, a networking business known for its Aloevera products (shampoo, gell and food supplements), networkers earned as much P500,000 or more a month to enable top networkers to buy luxury cars, with one of them driving a BMW. I came to know about this in the late 1990s when I was editing a page on small business for the newspaper Today. I did the story and I placed a screaming headline: "Ordinary people earning extraordinary income." A friend later invited me to join Forever Living, but I turned her down. My experience had taught me that I was not cut for that kind of business.
A few words before I wrap up this article. Network marketing business is a "bubble" business. it will not last long. So when you start earning, save as much as you could and go into more stable businesses, probably franchising or whatever you have in mind. Who knows that from network marketing you could get a 7 Eleven franchise, which may cost not less than P12 million, or Waffle Time franchise which will cost a few hundred-thousands. And when someone invites you to join network marketing, don't ask him/her how much she is earning from it before you decide to join. Your earnings will not depend on what he/she is, but on what you are. Are you persuasive enough to go into it? if not, don't join. Or if you want to take a chance, go ahead. It's worth the experience. After all, life itself is a gamble.
Please visit my Facebook page https://www.facebook.com/casmayor or just look for Casiano Mayor at FB.
No comments:
Post a Comment