This blog focuses on two aspects of network marketing and direct sales: The Distribution Model and The Profit System. Much of this information can also be found in Chris Widener’s CD titled The Invisible Profit System.

Warren Buffet has purchased a number of network marketing and direct sales companies. Many large companies use network marketing and direct sales divisions to get their products to their customers. But why?

Let’s take a look at the typical distribution model. The first step in this process involves building large warehouses to store products. Next, a large fleet of trucks, trains, or airplanes must be used to move the product from the warehouse to the store fronts. The store fronts are typically multi-million dollar investments or require very large lease agreements. Lastly, thousands of employees are needed to make this all happen successfully. Just think of how much time, money, and effort is wrapped up in that model.

Now, let’s look at the network marketing model. Companies give the money (that would have otherwise been used to operate the typical distribution model) to the people who actually help get the product to the customer. It gives the money to the people rather than the process.

Most people don’t think of it this way, but you are already involved in network marketing; you just don’t get paid for it. How many times have you seen a good movie and couldn’t wait to tell others about it? That’s network marketing. Have you ever been to a great restaurant and mentioned your experience to others? That’s network marketing. You see, every single person is already in network marketing.

What you need to understand about network marketing is that companies pay you to get the word out on their products. That’s all it is.

Network marketing and direct sales are more popular than ever. Corporations are downsizing all the time. People are becoming fed up with the instability of their j.o.b. J.o.b., by the way, stands for “Just Over Broke.” People want to work from home. They want to own their own businesses and spend more time at with their families. They want to take more vacations. People want to make more money.

The people who become financially successful get into a profit system rather than a wage system. Profits are better than wages because profits are ownership in one’s own financial future. Wages means trading time for money. As soon as you stop trading time for money, you stop getting that wage. Nobody gets rich in the wage system. People get rich all the time in the profit system. Profits can be limitless. Pro athletes, on the other hand, get rich in the wage system. If you can throw an 85 mph curve ball, then maybe you can get rich in the wage system. Corporate execs make a lot of money in the wage system, but most of their wealth comes from the profit portion of their contract. For example, stock options are where they make their millions.

If you look at the Forbes 400 Wealthiest People List, you won’t find anyone who is still in the wage system. These people own their own business; which as you now know is in the profit system. Bill Gates started his own business. We all know how wealthy he has become. There is a second kind of person on the Forbes list. These are people who inherited their money.

So, why are there so many people still in the wage system? The wage system is low risk. But, as you know with any investment, low risk equals low reward. You might not lose your j.o.b., but your ability to grow to financial independence is limited. The only way to get wealthy in the wage system is to put some of your money into the profit system; such as investing in rental houses or making stock market investments.