Heard of “internetworking”, network marketing is a business model that thrives on networking with people, word of mouth marketing or some call it referral marketing.
Recently I did a research on Richard Poe as I have recently read one of his book called the Wave 4 and I’m really impress with his insights and views and how he categorize the growth of the network marketing industry by waves and how we are all into wave 4 and riding on the internet to build your internet home based business is the fastest way, convenient way.
I found A Powerful Article written by him while doing a Google Search, and I will be including some important snippets of it here:
Wave Four: Network Marketing: The Most Powerful Business Force Of The 21st Century
(If you are interested in reading the full 12 page article, simply google “A Powerful Article By Richard POE”)
Wave Four: The Tsunami
Avon’s conversion is but one example of a movement now sweeping corporate America. For years, Fortune 500 executives have observed the Wave Three phenomenon from afar. Emboldened by Network Marketing’s growing respectability, they are finally starting to cash in on it themselves.
Network Marketing, in the new millennium, will no longer be the exclusive preserve of entrepreneurial mavericks. Through distribution deals, strategic alliances, mergers and acquisitions, Network Marketing sales forces are, even now, being integrated into the global strategies of the largest and most powerful corporations.
“In the future,” says marketing consultant Faith Popcorn, “we’ll be looking at Network Marketing the way we look at regular marketing,”
Popcorn has observed this trend in her New York-based BrainReserve consulting practice, which serves blue-chip clients such as IBM, American Express and Eastman Kodak. A few years ago, Popcorn recalls, BrainReserve clients routinely dismissed her urgent warnings to prepare for the Information Age– two key facets of which, she told them, would be competition from the Internet. “They would say, ‘Oh, we’re not worried about the Internet,’” Popcorn recalls.
Then sales conducted over the Internet quadrupled in the past two years, leaping from $2 to $8 billion. “Now when we do our futurescapes, we show clients who their most worrisome competitors are likely to be,” she says. More and more, the competitors who arouse her clients’ greatest fears, she observes, are turning out to be Network Marketing companies.
Paul Zane Pilzer learned to respect the industry’s power-the hard way. For years, he attempted to sell his educational CD-ROMs through conventional channels, such as direct mail, retail stores and schools. His company, Zane Publishing, based in Dallas, poured $25 million into marketing. But every distribution channel lost money.
All, that is, except one– Network Marketing.
Pilzer was introduced to the industry in 1991, he was promoting his book Unlimited Wealth through TV talk shows and other media. On an audiotape he made with Tony Robbins called Powertalk, Pilzer explained that the big money in the 1990s was to be found, not in building better mousetraps, but in finding better ways to distribute those mousetraps.
In the movie The Graduate, Pilzer related, a well-meaning businessman offers Dustin Hoffman’s character, Ben, a single word of career advice: “Plastics.” That was good advice, back in the 1960s, when the best money was to be made in finding ways to reduce the cost of manufacturing-by making objects from plastic instead of metal, for instance. But this was no longer true.
“As a result of advancing technology,” said Pilzer, “the actual production cost of an item has fallen to where it typically represents less than 20 percent of the retail price.” There’s not much room anymore to push production costs down. Distribution costs, on the other hand, now account for 80 percent of an item’s price. For that reason, said Pilzer, the big opportunity now lies in finding ways to distribute products more cheaply.
Pilzer had been a professor of Economics, a vice president at Citibank, N.A., and an economic advisor to Presidents Reagan and Bush; he had never heard of Network Marketing. But Amway distributor Don Held, listening to the Robbins-Pilzer tape, was thunderstruck.
“He was saying that the big money now was in distribution,” Held remembers. “When I heard that, I said, ´My God, that’s what Network Marketing is!’” Held tracked down the famous economist and retained him to speak at an upcoming Amway rally.
“When I got onstage, everybody took out a pad and paper and started taking notes,” Pilzer recalls. “They got very serious. I felt I was with my students, prepping for a final.” Pilzer became a Network Marketing celebrity overnight. For the next few years, he spoke at scores of Amway and other Network Marketing conventions. In 1996, he started distributing his CD-ROMs through Amway, as a sideline to conventional marketing methods. “I wish I could tell you I saw Network Marketing as the opportunity from the very beginning,” says Pilzer. “But I didn’t.”
Wave Four Network Marketers will provide a Distribution Freeway through which thousands of client corporations will move their wares.
As his other income streams dwindled to nothing, Pilzer’s sales through Amway increased each year, until Network Marketing distribution accounted for every penny of his $8 million revenues. Just last year, Pilzer bowed to the inevitable, reorganizing his company to distribute exclusively through Amway. “We have failed at retail,” he admits. “We have failed at direct mail. But we have succeeded beyond any of our expectations Network Marketing.”
The Distribution Freeway
Why did Pilzer’s product sell so brilliantly through Network Marketing? The industry, says Pilzer, offers the personal touch. Customers browsing through a Barnes & Noble or Blockbuster store are looking for books and videos, not educational CD-ROMs. They hardly even noticed Pilzer’s displays. But Amway distributors use the CD-ROMs to help their own children succeed in school. Their personal testimonies to friends and family arouse interest in the products, and close sales.
Hundreds of prominent companies now distribute through multilevel firms. Transnational behemoths Dupont and Conagra have teamed up to launch Legacy USA, a Network Marketing subsidiary that sells proprietary nutritional products. IBM is selling Internet training programs through Big Planet, a division of Nu Skin International. Amway sells cars for GM, Chrysler and Ford, appliances for Hotpoint and Whirlpool, and long-distance service for MCI. “Our catalog today looks like a small version of the classic Sears catalog,” says Held. It is a sign of our times that the Sears catalog in fact no longer exists, but the Amway catalog does.
In the old days, smart entrepreneurs invented better mousetraps and used Network Marketing to carry them to market. But, in the years to come, MLM companies will no longer need to invent new products. Their business will be selling everyone else’s “mousetraps.” Wave Four Network Marketers will provide a Distribution Freeway through which thousands of client corporations will move their wares. In the 21st century, Network Marketing will emerge as the most powerful way to reach consumers.
Internetworking
The fast lane of the Distribution Freeway will be the Internet. Shrewd observers of the high-tech scene noticed years ago that Network Marketers were leading the way in commercial applications of the World Wide Web. At a time when corporate America dismissed the Net as all hype and no substance, Network Marketing distributors were building downlines through website promotion and e-mail blasting.
“Network Marketers look at every edgy opportunity,” says Faith Popcorn.
Avon’s Walter Bracero agrees. “‘Internet’ is short for ‘internetworking.’ MLM is about networking, and there’s probably no quicker way to establish a network than through the Internet today. We are looking at leveraging the Internet very heavily.” Avon has already made a good start, in that direction, with Avon.com, named the number-one retail website of 1998 by Computer World.
“With the downsizing of big companies, the whole economic structure of work is becoming different from anything it’s ever been before.” – Michael Gerber
America Online has become a hotbed of recruiting activity through its Network Marketing message boards. Amway plans to launch a “virtual mall” later this year. One of the hottest sites in the business is MLM.com, launched in 1997 by Craig Wennerholm and his partners. This online Network Marketing newsroom gets more than 100,000 hits per month, after only a year and-unlike much-touted Net-based companies such as Amazon.com-MLM.com has already broken even through ad sales.
And now that mainstream business has begun to catch on to the basic use of the Internet and World Wide Web, some Network Marketing companies and distributors are taking it to the next level.
“Back in 1996,” says Wennerholm, “MLM’ers were using web pages mainly as an electronic brochure, to tell their story. Now we’re seeing more and more companies utilizing e-commerce capabilities. It has become an interactive business tool to process orders and new applications, to query databases for customer information, or even to notify people of upcoming events. I really think that’s where the industry is going.”
Network Marketers of the future will use the Internet to receive real-time corporate videos of training sessions, company announcements and opportunity meetings– programming they can now get only through pricey satellite broadcasts. That’s the prediction of Stuart Johnson, whose company, VideoPlus in Lake Dallas, Texas, sells communications products and services to Network Marketing companies.
“All that’s needed is more bandwidth,” Johnson says, “which is going to come from cable modems and higher speed DSL telephone connections. Right now, there are only one or two million homes, out of 100 million, that have that technology. That’s going to grow substantially over the next two years.”
This article was written, I believe a few years back, now it is no more about kbp but mbp!
Here is an example of a company that is fully riding on the Wave 4 of our industry…
–> Success University <--
