10 www.homebusinessnetwork.co.uk Issue 2July 2009
SECOND LIFE :: HERBALIFE NEED TO KNOW
Couple weigh up the
The network
costs of commuting
marketing industry
By Philip Smith
By Nikki Mattei
For years, Martin Cosgrove, 57, spent three hours
THE network marketing industry is often overlooked when
a day commuting to his IT job in The City while his
home business opportunities are discussed. However, it
wife Lynne worked part time as a secretary and
should be ignored no longer as it is becoming one of the
administrator trying to juggle family life.
fastest growing business models today because it offers
“I was trying to work around my daughters and was
a low-cost, duplicatable home business package.
fed up with paying for a child minder and struggling
The network marketing or MLM (multi-level
with school holidays,” says Lynne.
marketing) industry is now well established in the
Now Martin’s commute is just three minutes: down
UK. By the end of 2006 there were 419,500 people
the stairs at their Woking, Surrey home and into
involved in direct sales generating sales of more
their home office. For Martin and Lynne run Sante
than £2 billion.
International, a business they set up under the
Many well-known entrepreneurs have seen
network marketing scheme selling and promoting
the opportunity, such as richard Branson with
the US-based Herbalife products.
Virgin Vie and Warren Buffett with The Pampered
“Martin was getting very stressed and burnt
Chef. Network marketing is even included in the
out so we went looking for something else,” says
curriculum at the Harvard Business School.
Lynne, 54. “We were searching for two years for
Network marketing offers people the
something to do. We did look at franchises but the
opportunity to start their own business with a
investment and risk was too big.”
minimal investment in time and money, a bit
They then stumbled on the network marketing
like a franchise but without the price tag. The
idea. “Unlike a franchise, we don’t pay a big upfront
average cost is £100 to £200. As an independent
fee nor do we pay a percentage of our takings.
consultant of the company, you have two
Instead we buy a business pack to get started and
distinct sides to your business: retailing products
then buy the products.”
and building up and training your own team of
Experts say you should always sell something you
consultants. You are compensated for both of these.
have an interest in. And for Lynne, a self-confessed
Network marketing is based on the power of
yo-yo dieter, Herbalife was the obvious choice. “I
leverage. In network marketing you increase the impact
was very good at losing weight and putting it back
of your efforts by building a team. This formula is based
on again. We tried Herbalife and I lost two stone, and
on the famous quote by John Paul Getty: “I would
have kept it off for 10 years, Martin lost 12lbs.
rather have 1% effort of 100 people than 100% effort
It cost the Cosgroves about £100 for the pack -
of one person.”
including the business plan, marketing literature and
Network marketing companies do not spend money
samples – and training. After that, they were on their own.
on traditional mass advertising and promotion. Instead,
“Herbalife is there to provide the products and literature
they make these funds available to their consultants in
but it’s great as we are not under pressure of a boss
the form of commissions and bonuses to recompense
telling us what to do. We do it because we want to. We are
them for their efforts.
flexible because it’s our own business,” she says.
The consultant is then responsible for the sales and
Unlike a franchise, Herbalife does not allocate regions,
marketing of their business (both the products and
so guaranteeing exclusivity. There is no need, says
the business opportunity) and this is an area which
Lynne. The target market is big enough, literally, for all
must be planned professionally and make use of the
the operators to share in the rewards “our main market
latest techniques.
is weight loss because 50% of people in the UK are
overweight,” she adds. “But we only need 30 customers.”
Choosing the right company
That doesn’t seem many, especially as the
When you have decided that you have what it takes
Cosgrove’s see an annual income to their 10 year
to work from home (focus and good time management)
old business of around £1m and a profit in excess
and that the network marketing model is right for you,
of £100,000. The idea behind network marketing is
start your search.
that you recruit others to become resellers – gaining
• Do the products or services interest you
commission from their sales. “once you have got your
personally? It will be a lot more rewarding if they do
30 customers you help others also get to 30. You build
• Check out the company. If they have been
up a team and share in their success,” adds Lynne.
around for years, are they still developing new
“As you get a bigger team you get bigger commission Martin and Lynee Cosgrove: Team building
products and are their training techniques up-to-date?
percentages,” she says.
If they are new, are they in a growth market?
The Cosgrove team extends to 150 in 12 countries. “We have
• Look at the training they offer.
some in russia who can’t even speak English,” she adds. “We
• Do you feel that the person who has introduced you to
are earning more now than when Martin was in The City. But it’s
the company (your sponsor) will be able to coach you,
about so much than that – it’s lifestyle.”
particularly in sales and marketing?
Herbalife’s main products are vitamin and mineral smoothie
• Look at the compensation plan. You need to understand
powder to mix with milk, juice, cereals, and yogurt, plus multi
how you can earn income and how easy it is to achieve the
vitamins “You have to give your body nutrition. Most people
necessary qualifying criteria.
nowadays eat too many carbohydrates and not enough protein,”
says Lynne. “We provide the products to our customers (Herbalife ❝
The idea behind network
• How much paperwork and admin is involved?
is only available via its distributors) and also educate them, marketing is that you recruit others
If you feel comfortable with the answers to all those questions,
gently, in to drinking more water, doing exercise and changing
to become resellers - gaining
then you have found your company!
eating habits but it’s not draconian. It’s very gentle persuasion.”
With the current economic climate, more and more people are
The whole Herbalife ethos is low key. It eschews blatant TV
commission from their sales.
❞
looking for a way to generate income, either to supplement their
ads in favour of a more subliminal approach. It acts as nutrition
existing one or because they are out of work.
adviser to the LA Galaxy football team (where David Beckham
I am passionate about pioneering attraction marketing and
plays), and Inter Milan. “When Inter plays you will see the
harnessing the power of the internet to help network marketers
Herbalife logo behind it,” says Lynne.
build powerful targeted marketing campaigns.
It costs about £1.50 per meal and the idea is that those on the
our industry is now seeing the start of a huge growth period
Herbalife regime will substitute one meal for a smoothie and eat
and I am so excited to be part of that.
sensibly during other meals. “We don’t look on it as a diet, more
a healthy way of eating. We try to get people to change the way
Nikki Mattei is the founder of Best Think Pink, www.bestthinkpink.com,
they eat so when they lose weight it stays off.”
which empowers women through health and through business.
DEBT factoring involves selling your provide a debt collection and ledger this service are called factors or debt of your sales ledger. As well as
invoices to a third party. In return management service. factoring companies. providing finance, which is probably
they will process the invoices and It is commonly used by businesses Invoice discounting is an alternative the main attraction, it offers valuable
allow you to draw loans against to improve cashflow but can also way of drawing money against your support services and credit insurance.
the money owed to your business. be used to reduce administration invoices. However, your business
Ceri Henfrey
NEED TO KNOW
Essentially, these companies overheads. Businesses that supply retains control over the administration
Alliance & Leicester Commercial Bank
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