There are many companies which fall into this category; many party plans, phone and utility services, legal and insurance plans, discount cards and services, air and water purifiers, and other plans that are really for salespeople.
The key part of this is the "salespeople" aspect. There is a huge difference between the small business model and the big business model in network marketing. The "plans" are primary a small business model as you are really retailing products. The big business model is developing a large team of distributors that ends up developing large volumes because of the size of the group. The small business model requires ongoing work to maintain an income. The big business model will eventually create the sought after “passive income”.
When you break down 'retailing products' you end up being a sales person. This is great for those who are the sales person types. This type of person does not have a fear of rejection and has, or can develop, selling skills. However, most of the population is not the sales-person type. They don't want to sell and do not like rejection.
As a result, many people do not do well with the "plan" companies. They may join the company after a positive product experience, but soon are dropping out because they end up doing with they don't like to do..and that is selling and the rejection that will come with it.
A large income can be achieved for the salesperson, but it is based on constantly replacing those who drop out because they are not salespeople. This does not create duplication, and therefore will not create a passive income. Passive income is created by “doing the work once and getting paid for it forever”. An example of passive income is buying an insurance policy; the insurance agent will get paid monthly as long as you keep that policy. Another example of passive income is writing a song and getting paid for it every time it gets played on the radio.
Next we will talk about Category 3 - "The Schemes"
This is part 2 of a 5 part series.
Part 1 - Category 1 - "Old guys"
Part 2 - Category 2 - "The Plans"
Part 3 - Category 3 - "The Schemes"
Part 4 - Category 4 - "Slow Growth"
Part 5 - Category 5 - "The Holy Grail"
To complete the series, do a search on:
The Five Categories of Network Marketing - Part 1
The Five Categories of Network Marketing - Part 2
The Five Categories of Network Marketing - Part 3
The Five Categories of Network Marketing - Part 4
The Five Categories of Network Marketing - Part 5
As this series continues, you will start to understand what type of company can create real wealth and not just another "job".
