Okay I spent a good chunk of my evening watching a basketball game where my favorite team lost (boo). I bought one of them tea drinks and sat near the bar of a commercial area of one of the tallest buildings along Ayala Ave. As I was walking away, dejected mind you, i couldn’t help but notice that most of the people with me in the area dominating almost all the tables were those dealing in the networking “business”. Yeah, the promise of big money for little investments and inculcating the sense of hard work into people to achieve success. It’s all good for everybody. I just have some thoughts about it.
It’s a hell of a marketing technique, by the company. And a great way to boost their profitability.
Okay, profitability. Almost all (if not all) of these networking companies boast of their high sales. Ding! You instantly think that their product must really be good, I’m gonna be rich with this! That may happen for you, but think about this: the company records sales the point a member signs up to buy their products as part of their conditions to join the organization. Whatever you do with those products, whether you resell them or use for your personal needs does not concern the company’s revenue generation anymore, they already sold you their product, adding to their mammoth revenue. And when you make other people buy their products (also known as “building your network”), then more revenue for the company. But what about the exorbitant earnings of members for every person included in one’s network? Compared to what they’re earning for every sale, doling-out meager percentages in comparison seems an easy enough deal. Which brings me to my original point. This seemingly win-win situation for all parties actually aids the company’s profitability as they get to cut-back on very high marketing/advertising expenses. It’s almost the same mindset as with the BPO’s wherein getting equally or even better results but at a more lower expense. Members do not all earn the same, only a few earn very high. The companies also save on salaries. I’ve been to some of these networking offices and I’ve observed that within those areas, the floors are dominated by members and potential members. You can count how many in there are the actual employees of the company (more on this later). There are more (rent, training, office supplies) but the bottomline is, well they get a better bottomline with ever increasing sales and low expenses. Boom, profitable company! Come join us! We perform well financially!
Marketing strategy? Huh? They pay me! Well, they pay you relatively smaller than what they would have to pay regular sales people on their payroll. Seriously, I have previously mentioned that member’s earnings are not equal. You can apply the typical table of hierarchy, few are at the top, a whole lot are in the bottom. You are presented by a member about the benefits of the product then about the benefits of joining and building your own network, or franchise as some ma put it. Think about this: what you are really doing is selling the company’s products to people so that these people may sell the products to more people. Sell? They pay me! Again, they may pay some for doing all these but let’s face it, not all get to expand their networks. Sometimes it stops with one person who after purchasing the company’s products find it difficult to convince others to follow suit (it can happen that almost all that person knows have already also joined) then the company need not to pay that person anymore plus they’ve already sold their products so boohoo, cha-ching. As a member you work hard to convince others to follow suit, along with this you are told to show people just how good the company’s products really are. Wait, what’s that? Tell people about the company’s products? Ain’t that marketing the company’s products? And the closing deal? “If you wok hard in this business, you can earn a lot” but first you must purchase products! And you have to purchase a lot. Some even require members to keep purchasing for themselves “to be fair to the company” (I’ve been presented this, don’t hate).
When you visit their floor spaces in some swanky buildings in the busines districts (I have been to two in Makati as well as in Ortigas) you marvel at their good decors and high class equipment but get a feeling of crampness. Never mind, the diligent member need not to present to potential members in the confines of the company’s premises. Anywhere can do, the setting is not important to close a deal. This is another strategy of the networking company. They can invest in expensive equipment because they do not need many of these. Their members can take care of it themselves. Walk around some coffee shops, restaurants, hell even fast foods around Makati in the evening and you get to see numerous people talking networking jargon. Some utilize their own laptops, tablets, even smartphones as aids.
I am not a member of any networking company. you may call a sour grape, that’s why i wrote this. But I’ve been to countless presentations for different networking companies just to immerse myself in the machinations of it all and have chosen not to join, well okay I’m kuripot and don’t really want to shell out that much cash. And I don’t really like selling stuff so far. But get this straight, I am not against networking, I am just fascinated and amused about how these companies do their business. I commend those people who have worked hard and are now reaping the benefits of their labor to create their networks. Kudos to all of you! Just be careful about the companies you are going to join. There are some scams after all. Peace! 😉