Let’s face it, a lot of people in home based business are associates of network marketing or multi-level marketing companies. But although this form of marketing – and, from the customer’s viewpoint, this form of buying – is favoured by many people, I’ve not seen a lot written about network marketing from a business analysis point of view.

I’ve read books and articles by people in the industry, explaining and promoting this form of business. I’ve also read plenty of comments and occasional articles, mostly on the net, critical of network marketing.

I did notice recently that there was a feature article in a very respectable Australian journal, Business Review Weekly, on the rising fortunes of Amway and other major network marketing companies (or ‘direct sales companies’ as some of them prefer to be categorised) – citing better management and the internet as key factors for the improvement. But I did not feel like buying the mag that day and just did the ‘cheapskate skim’ at the local newsagent’s shop.

So I was very pleased to see that Scott Allen, publisher of the Virtual Handshake blog, a prolific and respected commentator on business networking and convenor of a Ryze network devoted to the subject, has teamed up with his colleague David Teten to write an overview piece for Fast Company, ‘What Can We Learn from Network Marketing?’

The article is in my view very balanced and does not shy away from noting that a lot of people leave the industry, with some observations on that. I was pleased to see that Scott and David interviewed among others a friend and sometime mentor of mine, John Milton Fogg, who has forgotten more about network marketing than most people will ever learn. John is the author of the network marketing classic, The Greatest Networker in the World.

So what do the authors of this article say we can learn from network marketing? They offer these seven points, which they explain:

* every business is a relationship business

* think analytically about your network

* create a community around your product

* leverage the unleveraged

* build a relationship first

* not everyone is a prospect

* use online networks

I’m sure there would be a lot of former network marketers still in the business if they had been taught and applied these principles.

And for those who have just joined a network marketing company or are thinking of doing so, my advice would be to get a really good understanding of these principles and how to apply them. For one thing, realising that ‘not everyone is a prospect’ and what that means, could save people wasting a lot of time and incurring needless embarrassment in trying to apply the hoary old ‘three foot rule’ (everyone within three feet is a prospect).

What do I know about the subject? Well, I’ve been associated with a few network marketing companies over the past ten years. I have gained a great deal from the experience. I did not (yet!) get materially rich, but I have learnt a lot, through application and hard slog, about the realities of business and sales particularly. I also went through some invaluable personal development – painful at the time but very ‘character-building’.

More recently, and in a sense somewhat to my surprise, I became an ‘independent marketing associate’ of the low-cost telecoms company, Cell Wireless Corporation, which is publicly listed in the USA. The primary reason I joined was basically as a customer who could give some referrals if it worked out, fundamentally to save on our phone bills. The 40-50% savings we are now getting suggest that was a good move!

Then, like the man who liked the razor blades and bought the company, I looked at the business plan and the planned product rollout and thought, hmmmm, I could do this business alongside my other business activities.

Now, armed with the principles Scott and his colleague have elicited from industry experts, I see myself being better able to build a team in a way which will work better for them and me than some older, less sophisticated methods might have done.

That article in Fast Company again is ‘What Can We Learn from Network Marketing?’

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