Posted Monday, August 9, 2004
I've seen a huge increase in ads relating to Network Marketing Companies where your sponsor promises to build your downline. I am sure that some of them are on the shady side. That's the way it is. However, I have personally seen some very respectable companies which allow the technique.
First: a bit of history.
Traditional Network Marketing Companies have used the term "tap root" for years. It refers to your best downline leg. Often, your sponsor will help you build this leg. It is called a tap root since it is supposed to anchor your business; hopefully supplying the nutrients (cash) needed to break even. In the meantime, you take the knowledge you are gaining by watching the work that is being done on your tap root, and establish additional legs. The additional legs provide the excess cash you want in order to improve your lifestyle.
Next: the Internet. How has this tap root idea been applied?
Commonly, you sign up for a program. You are placed at the bottom of one of your sponsor's legs. Additional prospecting by your sponsor and/or their upline places people under you. In most cases you do not even know the people being placed under you. However, as these new people buy products from the company, you get a bonus cheque. "Great! I'm getting rich and all I'm doing is buying product and watching my upline add more people!"
Not so fast. Study the compensation plan. Do the calculations. You will probably find out that you max out at a bonus that is less than the cost of your required minimum purchase. You are at best getting a quality product at a discount. Big deal.
"Well then, how do I get rich?"
It's no different than the traditional model. You have to start new lines, or legs. Yes, YOU. If you have a good sponsor, they will help you here as well. They may use your ID in some of their ads in order to give you a quick start. Same as it has always been. If they get you excited and do a good job of teaching you, you will eventually go solo. Then your sponsor can cut you loose and move on to another prospect. They have created some residual income. That is the goal, right? Residual Income.
Now, one problem remains. How do you get those prospects that you require? Cold calling? Your warm market? Ads on Yahoo? Ads on Google or Overture? Ads in e-zines? That's another article!
I want to leave you with one other fact to ponder.
If you spend $6,000 promoting a web site and your opportunity, and you succeed in developing a basic $300 a month residual income, what is your return on investment (ROI )?
Well, that $300 a month is (300x12) $3,600 a year. That works out to a simple interest rate of 100x3600/6000 = 60%.
How many of you have an investment that returns 60% ?
Have a great future,
About The Author
Richard Killey is webmaster of (http://www.comeandread.com) and publisher of the popular humour e-zine, Jerry and Jenny Stories. He also helps people to begin making money on the net with little or nothing down. He can be reached at firstname.lastname@example.org