Conventional vs Network Marketing business

Recently I have a correspondence with a business coach who shall remain anonymous. He stated the following in his weekly newspaper column.

……….“I would argue that the fundamental purpose of any business is to add value to the products or services it offers. In a bookkeeping business for example this is achieved by charging for the skills its employees possess and which the customer does not. In a manufacturing context, the design, fabrication, and assembly of components creates a product that serves the needs of the purchaser and for which he is prepared to pay. In both cases, the price charged is greater than the costs incurred – the “added value”. Providing the business controls its other costs, such as overheads, the result of the process is profit and, importantly, a return on investment – the key measure of business success.

Recently I have been prompted to consider this topic from a somewhat different perspective when confronted, with several business opportunities claiming the power to change people’s lives. Invariably, the literature focuses on acquiring wealth and, as a result, giving the newly wealthy person a freer and more fulfilled lifestyle. (He has confirmed to me that he is talking about network marketing companies here).

When I looked closer at the available information, though, I struggled to find out much about the products or services that were offered to paying customers in order to create all this wealth in the first place. In other words, the fundamental purpose of this business model seems to be making some (and I suspect only a very few) people very rich. What the customers of the products got was very unclear and, it seems largely unimportant to the promoters of the “business opportunities”.

We mustn’t be blinded to the true purpose of business by the tempting glare of wealth creation for a few. Profit should be a result of adding value, not the solitary objective”.

Right that’s his bit finished.

Where do you want me to start? There is enough copy above to inspire me to write a book on the subject.

The inference here is that network-marketing companies do not have products that add value to the customer and that the most important thing is “the tempting glare of wealth creation for a few”. I am a professional person so I am not going to swear here but I have to say that the guy must have been living in a cave for the last 20 years with no access to the outside world.

I do not have a problem with the premise that products need to have added value and benefits; I think we can all agree with that one. However I need to go back to fundamentals here so that we can compare conventional vs network marketing businesses.

Lets take a conventional business, who owns the business? A business man/woman, of course. Who gets to drive the Mercedes and have the holiday home in Spain, same answer. Who gets to retire with lots of money, (assuming they are not incompetent), yes, you got it, same answer. This is wealth creation for the few.

Who are the people who create the wealth? the workers. Do they get to drive a Mercedes and have a holiday home in Spain and retire with great assets and great wealth? Nope. Anybody would think I was a communist. Far from it, all I want to do is to create a level playing field, where everybody has an equal opportunity to succeed and to show people that there is a real alternative to the conventional route.

I think the statistic is that 80% of conventional businesses will go bust in five years, so much for conventional businesses, and what about the workers, they have got to go out and find another job, (back to square one).

I now run two network-marketing businesses, for people who want a choice.

Firstly I am an Independent Distributor for Utility Warehouse (UW). I provide your home phone, mobile phone, Internet, gas and electricity all on one monthly fully itemised bill. UW is a top 250 UK PLC voted best buy by WHICH magazine for virtually everything they provide. An average household will save between £800 - £1000 if you put all of your services with them.

94% of our own customers said that they would refer us to a friend or family; how cool is that? Do you think 94% of British Gas or BT’s customers would refer them to a friend or family?

UW was voted “PLC Company Of The Year” last year by the Financial Times and UW was the no1 share on the UK stock exchange last year. I love my customers, they are fantastic, I treat them with respect, they get benefits, they get major savings, they get me. Is that added value or what? UW will be a top 100 company within the next 5 years and guess what UW is a Network Marketing company, my friends it is a brilliant company. It has the best management team of any company I have ever known. Right that’s enough on that one, I could go on, but you get the point.

The second Network Marketing Company I have recently joined is called Agel Enterprises and again they have first to market category-creating products, yes guy’s products.

My friend who wrote the article in the paper is living in the dark ages.

I will also make a prediction here that you can come back to me in 5 years if I am wrong.

“The Internet will change everything we do, it has only been in existence for 14 years and what has been achieved so far will pale into insignificance as to what is going to happen in the next 5 years”. You ain’t seen nothing yet, people need to wake up and “smell the coffee”.

The high street will have to adapt or shut down. Corporate companies are rethinking their marketing strategies as I write this. Over 50% of advertising revenue has already gone online.

Do you think business owners like paying people great wages and pension and National Insurance contributions and sick pay and holiday pay? Nope. They will get away with what they can get away with, simple.
There are 1 million unemployed young people out there in the fast approaching 3 million unemployed; there are also 2.5 million on incapacity benefit on top of that. That is a lot of people. The world of work has changed forever and you need to realise this.

Did you also realise you are going to max out your income at 35 years old, after that you are expendable to the company. Your income will go down as you approach retirement which is no longer 65 but 66, because you are probably no longer working in the industry that you were initially trained in, some people will be doing any kind of work just to keep the income coming in. And how are you going to save up for a pension in this scenario?

In a conventional job you get an hourly rate and perhaps some overtime and you may also get a pay rise once a year or you get a salary which will include an amount of unpaid overtime and where I am sure you also feel obliged to stay late to show the boss how committed you are, to his business. My point here is that there is a ceiling to how much you can earn from a conventional job.

The great thing about NM is that there is no limit on how much you can earn.
If you are looking for extra £200 per month that can be easily achieved in a few months if you looking to achieve a very substantial income then network marketing will also be able to do that for you. Work a network marketing business hard for 5 years and you will have built up a substantial residual income.

What is wrong with a “freer and more fulfilled lifestyle”, (my friends words), Do you want to work until you drop? I don’t.

Did you know that the network marketing industry is a 130 billion dollar a year industry operating in 100 countries and involving 57 million people. All of these people cannot be wrong.

Another prediction.
“The combined annual turnover of all network marketing companies is going to triple in the next ten years”, (because we are only scratching the surface of this industry at present).

You see the Internet has created a level playing field, do you understand what I am saying? It is a fantastic opportunity for everyone, yes everyone.

So my conclusion here is safe is the new risky. People who stand still will not win out. Everybody should have a part time network-marketing job. It is going to be one of the only ways for people to secure a pension. Or perhaps you are relying on the government to look after you in your retirement. I wouldn’t bank on it.

Ring me now if you would like some further information on this fantastic industry.

Peter Ragg 2.11.09