NETWORK MARKETING SECRETS: Recession Proof or Just Recession Resistant?

Network Marketing Secrets with Candy Webb

Looking at the data reveals that Network Marketing is probably not 100% recession proof as it's many advocates would have you believe, but, there is a strong case to be made for it being "recession resistant". The age-old assumption that Network Marketing is counter-cyclical is not quite accurate as sales of Network Marketing products have taken a modest "hit" over the last two years, according to the Direct Selling Association (http://www.dsa.org) figures:

"It is instructive to look at the last documented recession, which lasted from November 2001 to November 2002. In 2001, direct selling companies reported an additional 1.2 million sellers over the prior year, with anecdotal reports indicating that many of those recruits came on board in the last quarter of the year, post 9/11. (The average increase between 1990 and 2006 was about 656,000 sellers per year.) Sales showed a similarly positive performance as 2002 sales were up $2 billion from the prior year, far outpacing the average increase between 1990 and 2006 of $1.2 billion."

The difference between the stability of growth in the Network Marketing industry (which is the major component of the Direct Sales industry) and the traditional retail environment , is striking and moreover, consistent, over time. In fact, the steady growth pattern over the past two decades in network marketing suggests that when the national economy sours, network marketing can be expected to demonstrate its recession-resistant tendencies. During more stable times, network marketing; i.e. direct selling, will track more closely with the economy, a fact that has become increasingly evident since 9/11.

In fact, considering the ten year period, from 1998 to 2007 (even before this current downturn in the national economy) sales in the Network Marketing industry had outpaced the traditional retail economy dramatically. The Direct Sales industry (including Network Marketing) showed a modest 3.4% increase over that ten year period, whereas the retail growth rate had taken a downward turn of minus 4% over the same period.

Again, this is particularly striking because the downward turn in the traditional retail market occurred before the current crippling downturn.

What does all this mean? It means simply that more than ever before, the reasons touted by so many business gurus for establishing a Network Marketing stream of income make tremendous economic sense! In a 2007 Success From Home magazine, Robert Kiyosaki talks about the "Cash Flow Quadrant" he popularized in his Rich Dad book series. The quadrants are:

R stands for employee

S stands for small business person, self employed or a specialist (doctor for instance)

B stand for big business owners (Kiyosaki says like his co-author, Donald Trump)

I stands for investor

He goes on to say: "Network Marketing is a B-quadrant business because it meets several criteria I look for in a business or investment. Those criteria are:

1. Leverage: Can I train others to work for me?

2. Control: Do I have a protected system that belongs to me?

3. Creativity: Will the business allow me to be creative, and develop my own personal

style and talents?

4. Expandability: Can my business grow indefinitely?

5. Predictability: Is my income predictable if I do what is expected of me? If I am

successful and keep expanding my business, will my income increase with my

success and hard work?"

My own personal experience has been exactly what Kiyosaki predicted. The unlimited nature of a Network Marketing venture is especially appealing coming from a corporate background. I am always amazed when those uneducated in the Network Marketing business model tout it as a "pyramid".

Keep that structure in your mind, and now visualize the controlling structure of any corporation. The CEO holds the top position, then the President, the Vice-Presidents, the Division Managers, and on down, creating a perfect pyramidal shape! And here is the amazing truth that so many people seem to miss. You are prevented from moving to the top of the pyramid simply because the sheer number of positions is so limited. Conversely in Network Marketing, there is no limitation on the room at the top. Here is how Kiyosaki explains it and this is precisely what I have experienced:

"A true Network Marketing business is the exact opposite of a traditional business model. The Network Marketing business is designed to bring you up to the top, not keep you down at the bottom. A true Network Marketing business does not succeed unless it brings people up to the top". Well said!

And another myth buster here. Some folks believe that the only way to succeed in Network Marketing is to be the first one in. That is one of the most erroneous myths out there. In fact, in Network Marketing, each new distributor has an equal chance to be the top earner. Frequently, we see that people that join a company after its 10th year become the number one earner! And who are these people - an estimated 63 million globally? Well, they represent both genders, although the numbers are definitely skewed towards females because many of the companies represent products that appeal specifically more to women. One of the reasons my own choice in the industry was health and nutrition, was to be in a product group that was attractive to both sexes, versus cosmetics, jewelry, cookware, etc. But even that is changing with the estimates that one out of every four men in the US use skin care products.

And what of their academic background? It is frequently said that Network Marketing is the great level playing field, and I believe that to be true. I have witnessed the success of many people with very limited academic background; in fact, the equalizer seems to be the degree of desire to be successful, not previous skill or schooling. But as a networker with advanced degrees (a BS in Economics and MBA in Finance) I always like to point out data from the 2008 National Salesforce Survey shows that 42% of the direct sales (networking) sales force have four year degrees or post graduate work. That indicates to me that their choice of this industry (much like my own) is a reasoned decision that took a good look at the various business choices out there, and said YES to Network Marketing.

If this is a choice you are considering, then it is just the beginning of your quest because there are many other factors that need to be considered...factors that will have a huge impact on your success. Just to name a few, the choice of company and product line is definitely important, just as doing your due diligence about the ownership of the company and the critical investigation of the compensation plan. Make no doubt here - compensation plans are widely different, and one can pay the distributors virtually twice what another pays. Perhaps the most important (and most frequently ignored) success factor is the track record and success of the person who will be your mentor. Even the best intentioned distributor in the best company can fall flat on their face if they are being advised by someone that has not demonstrated their ability to achieve financial success.

Yes, I believe this industry is the best hedge against recession, against lay-offs, against unemployment or limited employment...the best bet for financial security, and because of that belief, I always welcome the "hard questions". Being a multi-million dollar performer in this industry for twenty years gives me the background to be your success coach, and so I invite your inquiries by email at webb@quiknet.com. I promise a quick, objective response.

Your Network Marketing Coach,

Candy Webb

While speaking of Robert Kiyosaki and Donald Trump, I always want to give a plug to their phenomenal book "Why We Want You To Be Rich" where they devoted an entire chapter to the Network Marketing industry. And I guess The Donald took his own suggestion, as just this month he purchased a network marketing company joining Warren Buffet, another wise investor, as a Network Marketing company owner. What do these guys know about hedges against recession that you don't know? Think about it!

Candy Webb, http://www.jimandcandy.com

Candy is currently a 200K Premier Select in XanGo, LLC and a Member of the XanGo Millionaires Club. Her weekly Training Call is posted on http://www.mymangosteen.com with four years of archived training files - virtually a Network Marketing university!

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NETWORK MARKETING SECRETS: Recession Proof or Just Recession Resistant?