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Expert View: A Hot Home Business

Professor Charles King talks about why network
marketing is catching on and the opportunies it holds.

INTERVIEW BY ANNA SOBKOWSKI

WORKING AT HOME: Could you explain why network marketing is a burgeoning business trend?
CHARLES KING: Network marketing as a system for distributing products and services is growing faster than the traditional retail sales distribution channels.Mere are now more than 11 million distributors in the United States who sell $15 billion to $20 billion in products and services annually. The sales have reached about $75 billion to $100 billion worldwide. Even large corporations like AT&T, MCI, and Colgate Palmolive are employing the process. Much of this recent growth stems from companies' massive downsizing. Today's "corporate refugees" view entrepreneurship as an attractive alternative to the traditional job. Technology has made all sorts of working arrangements acceptable. Indeed, innovations in electronic communications, computer capabilities, package delivery services, and product development enable network marketing companies to function more effectively dm ever before.

WAH: How do network marketing and pyramid schemes differ? 
CK. Pyramid schemes make virtually all their profit from the fees new recruits pay to sign up is not from commissions on the sale of products or delivery of services. Fees can go into the thousands of dollars. Because they are illegal, pyramid schemes might seek a legitimate cover by claiming to A a line of products. A distributor can spend $5,000 for a garage full of useless products, the n discover that the guy he bought them from has skipped town. A legitimate network marketing company pays the distributor a commission on the sale of products, not for recruiting anyone. The signup fee is low, typically in the $40 to $100 range. While most companies encourage distributors to buy a small amount of product to become familiar with what they will be selling, a money@back guarantee is generally offered for all unused product if the distributor decides to drop out of the program.

WAH. Perhaps only 5 to 10 percent of people who try network marketing succeed. What personal qualities are necessary?
CK: People get into the industry with widely differing objectives, Most, in fact, are not interested in making network marketing their sole career or primary source of income. Some want to get involved only to the extent that they can buy products they like at wholesale prices. Others simply want to supplement their primary income. Those who go on to earn high incomes spend time learning about their company, their products, and the business of network marketing. They tend to be extremely motivated, hardworking, and tenacious. They have a clear sense of what their life goals are in the short term and years down the road and they are committed to network marketing as the way to achieve their goals. These are positive individuals with good people skills who can deal well with rejection.

WAH: You've said in SUCCESS Magazine that it usually takes three to five years to build a substantial downline.
CK: Keep in mind that the term substantial downline is relative. Depending on a people in his downline to earn thousands a month, while another might need hundreds to earn the same amount. I think three to five years is a realistic time frame for a distributor to learn to "walk the walk and talk the talk." Some people may move faster requiring only 18 months to two years others more slowly, perhaps requiring six to seven years. Newcomers need time to learn about the technical aspects of their product line and about company policies and procedures. They need time to attend seminars and talk to those in their upline, from whom they can learn how to prospect, recruit, train, motivate, and manage their own downlines. It takes time to recruit a frontline or first generation of distributors and time for first generations to mature into productive distributors themselves. Because of the investment of time, the idea of network marketing as a get-rich-quick scheme just doesn't apply.

WAH: Describe the seminar for network marketers at the University of Illinois Chicago.
CK: The two-and-a-half-day seminar at our Chicago campus is the first offered by a major university in the history of the industry. Through lectures, discussions, and small group workshops, we teach the entrepreneurial skills required to be successful. Students include physicians, Attorneys , corporate professionals who want to switch careers or have lost jobs, teachers, engineers, and homemakers. Some are new to the industry and come to hear what it's about. Others are already successful network marketers who want to improve their management skills. Our goal is to set the standard for professional education in this field and offer course work for a certificate that confers credibility and professionalism on the network marketer.
    Anna Sobkowski is a New York-based journalist specializing in business subjects.Working at Home, p. 116

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