Earn Residual Income In Network Marketing | THE TRUTH

Many folks question whether making residual income in network marketing is even possible. With so many people trying and failing to live the network marketing dream, it’s easy to see why people are skeptical.

But earning residual income in network marketing is possible.

Let’s be clear…

You won’t get to the residual income stage overnight.

But if you’re willing and able to put in the time and hard work initially, for 3 to 5 years, it is definitely possible.

But how do you do it?

Let’s start with a quote from Randy Gage’s latest book, Direct Selling Success:

You don’t grow your group. You grow your people, and they grow your group.

This is a profound statement.

In order to really make residual income in network marketing, you need to build your business to the point where other people are doing the majority of the selling and recruiting for you.

You need to create duplication. That’s the real secret to earning residual MLM income.

For the first 3 to 5 years, you will need to direct your focus to following directions. Intentionally implement the system that you’re taught by your business leader.

Do not complicate it. The system has been designed specifically to maximize duplication. This means that they have tried to find the optimal balance between effectiveness and simplicity.

And simplicity is key.

If you want to build a team that will follow the system and teach their own recruits to follow the system…

Well, the system needs to be simple.

Simple to implement, and simple to teach.

Earning residual income in network marketing really comes down to 3 main things:

• Sell products
• Recruit builders
• Train builders to do the same

Don’t make it more complicated than it needs to be.

So let’s get into the details.

How MLM Works

Network marketing, or multi level marketing, is a business model that uses independent sales contractors to market and distribute products into the real economy.

MLM companies use this model instead of paying millions in retail fees and advertising campaigns.

You and I as network marketers have the opportunity to start our own business by becoming a distributor for one of these companies. We can then sell products to people in our personal networks, earning commissions for each sale made.

We can also build a network of distributors which can exponentially grow itself over time. 

This is where the residual income starts to kick in.

Some of the top earners in network marketing have teams of tens or hundreds of thousands of people.

A team that big will certainly earn you 6 or 7 figures per year, residually.

If you want more details on how MLM works and why it might be a good opportunity for these crazy times, be sure to check out this article.

The Residual Income Opportunity

Give me a lever and a place to stand and I will move the earth. Give me a fulcrum, and I shall move the world. – Archimedes

Leverage is how you are going to make residual income in network marketing.

And you will get leverage by earning profits from the efforts of a large group of people. As the late great Jim Rohn said:

Profits are infinitely better than wages.

As a young boy or girl, you were probably taught that you should go to school, get a good job, work hard, and wait patiently for your pension so that you can comfortably retire.

That model is dead.

In the 1980s, the 401(k) quite literally killed the pension. Since the introduction of the 401(k), the risk of your retirement money no longer rests on your employer or the government. 

The risk lies squarely on your shoulders.

If, God forbid, the American stock market stops performing well, like we’ve seen in the Japanese markets, all of your retirement savings could be at risk.

That is if you are even able to save any kind of nest egg in your 401(k) account.

Wages have been stagnant in North America for decades. They do not keep up with inflation. This means that as time goes by, your paycheck is buying you less. Year after year, people are feeling their budgets tighten.

Year after year, you go to your job. You work hard, trading your time for money with the hope of one day being financially secure.

But the truth is, time is finite.

Money is not. 

Trading your finite time for money is simply a bad deal.

So how do people get rich in this crazy world?

They do it by using leverage.

The wealthy stock investor buys portions of companies that trade on the stock market. As the company does well based on the efforts of the employees that work there, the stock rises in value.

And the investor earns profits… based on the efforts of other people.

The savvy entrepreneur starts her own company. She hires employees to do the grunt work, and grows the company by providing jobs and valuable products to the marketplace.

And she earns a good income… based on the efforts of other people.

With network marketing, you have the opportunity to build your own income stream that will grow based on the efforts of others.

You don’t need to create your own product. No need to worry about supply chains or logistics. No corporate BS. And you can get started for a very small investment.

As a network marketer, you are effectively working as an independent sales contractor. 

If you can follow a simple system for an extended period of time and teach others to do the same, you can build a very large network of sales contractors and recruiters that will grow and train their own networks.

As your network marketing organization grows, so will your income… based on the efforts of others.

This is the promise of network marketing.

Choosing A Good Company

If you’re already in a company that you’re super excited about, great! You can skip past this section if you want to.

But if you’re looking for a company to join, there are several things that you should consider about any MLM before taking the leap.

Is there demand for the product?

A network marketing company should have a loyal base of customers that happily buys and consumes the products, regardless of the business opportunity.

If every single customer is just buying the products in order to get a bonus check, the business is not sustainable.

Any company’s revenue has to come from sales volume alone. If it doesn’t, it might very well be an illegal pyramid scheme.

Is the product consumable?

Have you ever wondered why network marketing companies tend to sell household cleaning products, skin care, vitamins, or utilities?

It’s because these products are great for network marketing.

People spend money on these product or services again and again, month after month.

This is a necessity for residual income.

If for example, your company sells tables, it will be impossible for you to earn residual income. Because people do not buy tables month after month.

Listen, tables are great. I love them. Whenever I am thinking about sitting down and having a meal, I look for the nearest table. I even own a few tables myself.

Tables are a fine product… just not for network marketing.

You need to be selling something that people consume. Something that they are willing to pay for month in and month out.

Is the compensation plan balanced?

The compensation structure should achieve 2 main things:

• Allow a brand new distributor to earn money quickly so that he will be motivated to keep working on the business
• Allow for long term large residual income so that top earners will stick around to provide training and motivation to newcomers

Does the business and product line excite you?

There should be some level of passion associated with the products you sell.

This will allow you to stay motivated and excited, even when things inevitably get tough. And believe me, tough times will come.

Whether you are excited about cars, health and wellness, finance, or physical fitness, you should be able to find a network marketing company that sells something you can get behind.

Sell, Recruit, Train

As we mentioned, success in network marketing comes down to 3 main steps:

• Sell
• Recruit
• Train

The only way you get paid in network marketing is when products are sold. You do not get paid for recruiting. All revenue comes from sales volume.

So building a loyal base of customers that buys your products again and again is crucial to earning residual income in network marketing.

If no products are sold, no money is made.

So where does recruiting fit in?

Remember, your time is finite.

You have a limited amount of time in which you can share your products with people. So if all you focus on is selling products, your income will be limited.

Luckily, network marketing allows you to recruit other builders and grow an organization of a large group of people that will also produce sales volume…

Allowing you to earn income from the efforts of all of these people.

But training is really where the rubber meets the road.

In order to truly build a residual income in this business, you need your organization to not only be self-sustaining, but actually grow itself without you putting in more effort.

It’s not enough for you to just sell products and recruit people into your organization.

You need to train your people to do the same.

Think about it…

You sell products and recruit people into your business. And then you teach your people to sell products, recruit, and teach their own people.

If done correctly, it becomes self perpetuating.

How To NOT Earn Passive Income

You might be tempted to take courses on high pressure closing techniques so that you can recruit every single person you talk to…

Please do not do this!

You will probably be able to bring in more people by doing this, but your group will not be able to duplicate what you do.

They will try. But when they’re unable to duplicate your complex closing strategies, they’ll conclude that the business doesn’t work and drop out.

This will happen again and again. And you will be forced to constantly recruit for the rest of your life in order to replenish your group.

You’ve effectively got yourself a low paying sales job and completely miss out on the passive income benefits that network marketing can offer.

Duplication Builds Residual Income

Duplication is the most important concept to understand if you want to create that elusive residual income in network marketing.

You can sell a ton a products and recruit people every week…

But if your team doesn’t duplicate your success, it will not grow to a large enough scale where you can enjoy that incredible passive income you’re always hearing about.

Here’s the truth:

It doesn’t matter what works. A lot of things work. What matters is what duplicates.

So how do you create duplication?

Follow The System

When you get started with your MLM business, you will be taught a system. The best thing you can do for your business is to follow the system exactly as it’s taught.

Remember, the incentives in network marketing are perfectly aligned. If you make money, your sponsor will make more, too.

They’re not going to mislead you.

The system that you’re going to be taught has been intentionally designed for maximum effectiveness and duplication.

And if you simply follow the system, your team will see that. They are looking to you for leadership. When they see that you’re succeeding by doing exactly what’s being taught, they will do the same thing.

Keep It Simple

You might be tempted to add things to the system in the hopes that your team will duplicate more.

This is almost always a bad idea.

Your system should be as simple as possible. This will not only make it easy to follow and implement, but it will also make it easy to teach.

Use Third Party Tools

When you are speaking to a potential customer or business candidate, you should always refer to third party tools when you’re asked a question.

After you’ve been in the business for a while, you will start to know all the answers to all the question you get… but you should still continue to use the third party tools.

Why?

Because it will signal to your candidates that if they want to build the business, they don’t need to be an expert in anything.

They don’t need to know any answers. 

They just need to know where to find the answers.

This will greatly increase duplication over time.

You may want to check out this full guide on how to succeed with network marketing.

Network Marketing Startup Costs

The investment needed to start a network marketing business is very low. Most companies will allow you to get started as a distributor for somewhere between $100 and $500.

For a business that has the potential of making you extremely wealthy in the long run, that’s peanuts.

There’s no other business that allows you to get started for so little.

Isn’t Network Marketing Hard?

Yes.

If it were easy, everyone would be a network marketing millionaire.

The truth is, the business is very simple.

• Follow a proven system
• Teach others to do the same

But don’t mistake simple for easy. 

You’re going to face challenges. You will become discouraged. And you will want to quit. But if you can persevere, it will be worth it.

How Much Time Does It Take?

Most network marketers spend anywhere between 5 and 40 hours per week on their business. It’s really up to you.

That’s one of the amazing things about the business.

There’s no boss.

You grow as fast or as slow as you want to.

Either way, it will be several years before you’re earning true residual income with this business model.

Isn’t It Risky?

No. 

Compared to any other type of business, there is very little financial risk.

You don’t need to stock inventory or spend a fortune on a business location. You simply pay for your distributor kit and get to work.

Let’s Wrap It Up

If there’s one thing I want you to get from this article, it’s that simplicity is the key to succeed in network marketing.

Simplicity is what will enable duplication. And duplication is what will allow your network marketing team to flourish and eventually grow without you putting in more work.

Imagine your income growing month after month without you doing any more work…

That’s the dream, right?

If you are able to grow your business to this level, you will probably want to work hard on it day in and day out.

But it will be passion that drives you, not necessity.

And that, in my humble opinion, is true freedom.