by Eddie Patin
(from the Financial Freedom and Achieving Business Success article series)
So by now, you know that I’m a fan of the “Rich Dad, Poor Dad” series of books by Robert Kiyosaki. I’ve read a half-dozen or so of his books whose subjects are interesting to me (there are dozens of those books by him and his team), and I’ve played the board-game, “Cashflow 101” at home, with friends, and at one of his seminars.
The whole point of the game is to get out of the rat race, onto the fast track (the investment field of the rich), and win the game by either achieving your ‘dream’ or making so much passive income (positive cashflow) from your investments that you’re well over what I consider ‘financially free’.
Once, I landed on an ‘opportunity’ square and came up with the following card:
Spare Time Co.
“You may join Direct 2 You (D2U), a direct distribution company. Good products, low starting income, growth prospects for learners and leaders. No promises, and much opportunity.”
Cost: $200
Cashflow: $0
The explanation tab said this:
“Network Marketing companies can be a great way to start a part time business. For a reasonable fee you may buy into an existing system and immediately start building your business vs. purchasing a franchise.
“By buying into Network Marketing, new distributors can focus all their efforts in building their business through sharing an automated business opportunity instead of worrying about the normal start-up headaches of a small business.”
In a game of chasing good investments that would produce positive cashflow, $200 sure seemed a small price to get into a business that, as I played on, seemed to grow and grow, making me more and more passive income.
Eddie joins D2u.
Eddie : Score!
(If you’ve ever played the game, you can appreciate that reference. The computer-controlled players always join up. They always exclaim, “Score!”)
But how much of that is a game, and where does the reality lie? In the last few months, while mostly unemployed and banging my head against the world looking for work, I played a good bit of “Cashflow 101” in between faxes, calls, and pounding the pavement. I always joined D2U, and I thought it was cool how every other turn, it seemed my income kept going up, $250 here, $500 there. But, it occurred to me that when that game was created, times were different. Nowadays, for network marketing, people use free advertising on the internet, YouTube, Craigslist, or they pay for google advertising, or any number of other ways to market their products and services cheaply, quickly, and VERY effectively. But back in the past, people put ads in the paper, and on bulletin boards, and made phone calls, or networked through their friends and business associates, so it was harder to make very FAST income (like today).
But ... I’m getting ahead of myself…
After playing the board-game, I started to entertain the idea of looking into network marketing again. I say again, because I’ve seen the opportunity three times in front of me throughout my life, and I turned it down all three times.
The first time I was faced with network marketing was when I was a teenager. I don’t remember how I made the connection, but my father and I ended up being invited to someone’s house in a nice area of town. It was a nice house. There were two business partners there, who sat us down and talked to me about an opportunity to join a network marketing group that had something to do with selling telephone services for Excel (remember them?). Back then, I didn’t know the first thing about finances, and business wasn’t on my mind in the least. I think, maybe, that my father was showing me that that world existed, and was giving me the chance to raise the money (if I wanted to) and get involved. ‘A good experience for the boy,’ perhaps. I didn’t take it.
Later, in my 20’s, but before I moved to Las Vegas, I called a classified ad’s number about what looked like a job. I ended up meeting the person I talked to at a restaurant, where he presented me with a business opportunity with “HerbaLife”, possibly the first of what would become many in the popular culture craze of ‘natural supplements’. The man I met with said that he was doing so well, making so much money, yadda yadda yadda—but something about him was off. After our meeting, I researched the company more, and I researched HIM, and finally located him living in a run-down camper in a shoddy trailer park. That gave me a bad taste about network marketing programs, and I avoided them for years. But, looking back, it did teach me a lesson: These systems are built on people working together, and the trust necessary in such an endeavor. You should never lie about how much you’re making, just to make your sales. Don’t tell me about your awesome car, and your swimming pool, etc., just to get me in the program. And I, getting into the program and soon dealing with my own prospects and sales, will never do the same. It also taught me, when I was looking back on it and recently researching the Independent Profit Center, that you’ve got to sign on with someone who you can trust, who can be a good mentor, who is serious about their business and serious about helping you with yours. I’ve found a good mentor, and I’ll be a good mentor for my people just the same.
The last time I saw a network marketing opportunity was when I was working as an ESL (English Second Language) teacher at a multicultural center in Las Vegas. The CFO (Chief Financial Officer) of the organization told me about a program she had recently gotten into, another herbal supplement program (like HerbaLife), that she was getting pretty excited about. She was taking the supplements and happy about them, and occasionally recruiting people she met to work under her. We chatted about how her program was doing from time to time, and I listened as she gradually made more and more money. Last time we talked about it, she was getting an extra $500 or so a week. She took some of that extra cashflow and re-invested it into another business—a cell phone store in a prime area of town. She’s transitioning over to the ‘B’ quadrant. I never seized the opportunity.
I’ve found, personally, that I don’t much care for the ‘herbal supplement’ type network marketing companies, although I don’t know too much about them, so I certainly shouldn’t be forming strong opinions. What I don’t like about them (and Amway, and Avon, and Mary-Kay, and all those others like it) is that you’re required to purchase a certain amount of their products every month. These products you purchase—you’re free to do with them as you please. You can sell them to customers, or use them yourselves. The CFO of the multicultural center I told you about above used her allotment of supplements for herself and her husband. And she liked them. That’s great. But, I personally don’t like the idea of having to continuously buy ‘inventory’. It seems like a rip-off.
There are many different kinds of network marketing programs, with many different products, and many different structures. Wikipedia defines network marketing as:
“Multi-level marketing (MLM), also known as Network Marketing, is a business-distribution model that allows a parent company to market its products directly to consumers by means of relationship referrals and direct selling.
Independent, unsalaried salespeople of multi-level marketing represent the parent company and are awarded a commission based upon the volume of product sold through each of their independent businesses. Independent distributors develop their organizations by either building an active customer base, who buy direct from the parent company, or by recruiting a down-line of independent distributors who also build a customer base, thereby expanding the overall organization. Additionally, distributors can also earn a profit by retailing products they purchased from the parent company at wholesale price.”
That basically means that you buy into the company and you make your money from selling the product, or from recruiting people below you (your team) who will sell the product, and/or recruit people below them, and so on.
I consider the product very important. Something that I’d want to use myself. That’s why I don’t much care for the herbal supplement companies (as a personal trainer, I know what works and what doesn’t), nor for anything where you have to buy more and more inventory. When researching network marketing programs to get involved in (there are a LOT of them), it’s also important to make sure there actually IS a product in the first place. A network marketing company that doesn’t actually have a product is just a “pyramid scheme”, which recruits and recruits and builds on itself until it collapses. Besides, as a true capitalist, it is important to stand behind a product. Otherwise, you’re just another con-man.
When I studied the Independent Profit Center, I liked their product. When you buy into the company ($249), you receive a bundle of software and e-books, all about internet marketing and advertising, and the re-sell rights so you can sell them to customers (if you wish). All of those products are things I can use to further my own business with IPC (Independent Profit Center). And, of course, I can use those products to help market my freelance writing services. I can also learn a lot about internet marketing from the e-books and their extensive training area that will help in my writing and any other internet-based businesses I ever get into. The way I see it, even if the program for some reason doesn't work out, the software, materials, and training will be useful for my other businesses, and worth the price of getting involved.
All network marketing involves a certain amount of sales. I consider it welcome experience, because to be successful in the ‘B’ quadrant, you have to have good communication and people skills. I was rather surprised when looking into IPC, however. Between of the system they have set up, the training they give you, and the products included, it really sells itself. They claim, in fact, since it’s all in the immediate market of the internet, that you can easily start making sales in the first week. In the times I’ve spoken with my mentor (the person I’m buying in under), he’s never tried to push the program on me (unlike that HerbaLife scum-bag). He merely answered my questions and gave me all the information I wanted—because the program sells itself. It will draw people like me, people like him, who are serious about business and want to build up their cashflow. And the lazy, whiny tire-kickers who want something for nothing and are only interested in get-rich-quick schemes will stay away.
With the Independent Profit Center, it costs $249 to get into it, and you get $200 for each sale. Very impressive. The $49 seems to be a one-time charge for setting up your webpage (they have a cookie-cutter webpage for making your sales). The $200 you pay goes up the line (to the person who recruited you).
As I said, it seems the program’s value really sells itself, and IPC advertises their program as “Getting $200 over and over again.” The website they create is kind of ‘over-flashy’ in my opinion, but according to my mentor, it doesn’t really matter. People who are interested will call or send an email (just as I did to him), and it’s more about creating the relationships.
All network marketing programs offer different payout plans, depending on the company, that are in place to make sure everyone is making money from the people they recruited. There have been many different structures through the years, which all have to do with passing occasional sales up to the people above you, or shuffling them around, but I won’t go into the specifics of the old plans, since it’s not terribly important. (You can find out which types, if you like, on wikipedia.) Independent Profit Center has a newly-designed payout plan called the “Staggered 3up Compensation Plan”. I’ll go more into this in the webpage section directly about IPC, but, suffice to say, you make plenty of money from your own work, and you’ll get considerable passive income from your “downline” (the people below you).
And, just like everything in life, there are good programs and bad programs. There are legitimate businesses, and there are scams. It’s all about doing your research and getting involved with the right company, and the right people. I, myself, am very confident about the Independent Profit Center. It will be my first real adventure into Network Marketing and the ‘B’ side of the quadrant, and I am very excited about the prospect and the unlimited potential for growth and income. I’m serious about growing my cashflow.
As I get further into the program, I’ll keep you all updated on how it’s going. I’ll continue to write articles to help educate those of you out there who are interested in what I have to say, and I’ll develop my resources for being a good leader for my team.
By the way, I make a lot of references to the materials written by Robert Kiyosaki and his business. I believe in the sanctity of intellectual property, so I’ll quote where I need quoting, and I won’t try to pretend I created any concepts I didn’t. In fact, if you go to my links / suggested reading page, you can find direct links to his website, and links to purchase his books and board-game, “Cashflow 101”. His books are excellent, if you take the parables with a grain of salt. There is a lot of knowledge to be gleaned from them.
