Corporate America has been downsizing and job security has faded into dimly remembered history. Statistics show that most new jobs now come from small business.
Home-based business has become a reality for millions of Americans - inspiring millions more to dream about opening one.
The term "networking" has become a buzzword in
business press, as more people realize crucial role of referrals in economy.
The Internal Revenue Service has adapted its rules (somewhat) to new home-based economy by recognizing independent contractor status and publishing specific tax-preparation guidelines for "direct sellers." In Tune with Times
There are a number of reasons why network marketing industry reached maturity and respect in 1990s. As millions of Americans launched home-based businesses and entrepreneurial ventures of every kind, they created a climate in which network marketing could flourish. For instance, it was not so strange anymore for an attorney to leave his practice in order to run a new company of some kind out of his den. Most people have come to know someone who dropped out of 9-to-5 world and turned entrepreneurial. Hourly and salaried employees have become intrigued with idea of financial freedom and economic autonomy. Suddenly, they are much more open to change - and better prospects for network marketing.
Another change that favors networking industry has to do with sex. In past, most direct sellers were women. As a result, this was often seen as a woman's business, which tended to discourage male recruits. But as opportunities in industry have increased, more men have been attracted to it; in turn, all-female perception has faded, increasing industry's ability to attract men.
The sheer number of network marketers also has exploded. By end of 1990s, more than 10 million people were involved in industry here in U.S., racking up more than $20 billion in yearly sales. Worldwide, number of distributors has topped 30 million, generating more than $80 billion in annual sales.
When an industry gets that big, even corporate bureaucrats begin to notice. Major multinational corporations are taking account of networking phenomenon, building it into their own plans for distributing products and services. Here are a few of marketing partnerships that have been formed: Avon-Mattel; Tupperware-Disney; Amway-Rubbermaid; DuPont /ConAgra-Legacy. The new "virtual networking" company will outsource almost all its activities: manufacturing, customer service - even accounting. One of world's largest banks, Citigroup - formed of merger between Citibank and Traveler's Group - has a network marketing division, Primerica Financial Services (formerly A.L. Williams Company) that is one of most profitable distribution channels for corporation's many financial products. These range from insurance policies to checking accounts.
Corporate America has validated success of industry by embracing public offerings of network marketing companies on Wall Street. Excel Telecommunications, Amway Asia-Pacific, and Nu Skin all successfully launched initial public stock offerings on major exchanges. Herbalife, Mannatech, Market America, Nature's Sunshine, Pre-Paid Legal, and Rexall, to name a few, are also publicly traded.
In 1990s, high-tech and financial companies became enamored of networking industry, as network marketing companies broadened their lines to include services as well as consumer products. Soon, it seemed every high-tech company was looking to networking as a means of guerrilla distribution in competitive markets. Companies in telecommunications, paging, Internet service, satellite TV, financial, and travel services were chief beneficiaries of alliances with networking companies. Today, even electric power is being sold by network marketing.
Why did conventional corporations cast their lot with wild and woolly entrepreneurs of network marketing industry?
Because they could see that it works. Specifically, network marketing distribution has several distinct advantages:
It is a powerful technique for introducing brand-new products - especially items that require demonstration or testimonials.
It generates strong "word of mouth," by directly rewarding consumers for sharing their excitement about a company's products or services.
