Basic Concept of Network Marketing

“NETWORK MARKETING is the Fastest Growing BUSINESS of 21st Century which must be joined by Every Young Man and Woman Globally otherwise you can never get the Best of your Youth age.          – DR. A.P.J ABDUL KALAM 

If I would be given a chance to start all over again I would choose Network Marketing”.           -BIIL GATES

Is network marketing is beneficial or not? What you think? Let’s find out in this blog.

What is Network Marketing?  

Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales.

Network Marketing is a new phenomenon that has gained ground in the last three decades and hence there isn’t much of research, study and literature that is available as in the other traditional theories and practice of Marketing. Multi-Level Marketing is an activity that anyone can take up at any point of time in life and generate income.

There are many types of network marketing:

1. Single-Tier Network Marketing

Single-Tier network marketing is very simple, you sign up for the program, then you start selling the company’s products or services and get your commission based on your sales.

Avon, beauty cream company follows this single-tier marketing. Some online platforms also follow the single level marketing where you drive traffic into their website and get paid like pay-per-click (PPC), or pay-per-lead (PPL).

2. Two-Tier Network Marketing

Double-tier or Two-tier network marketing requires from its members to recruit others. In this model, you get paid both ways; direct sale of product or service (or bringing traffic into their website) and recruitment of other members to work under you. Ken Evoy Site sell is a very good example of two-tier network marketing.

3. Multi-Level Marketing

Multi-level Marketing (MLM) involves two or more tiers and it’s based on the distribution marketing based network. MLM allows its members to earn money when the tier is five or more times deep and there some other incentive for recruitment.

It has two other types of network strategies like name-driven network marketing and market-driven network marketing.

This form of marketing does not require any qualification or any investments. Besides generating income, the individual gets to build social contacts and relationships as well which is seen as an added benefit.

Multi-Level Marketing is also referred to as ‘Pyramid Selling’, ‘Network Selling’ as well as ‘Structure Marketing’ etc.

What attracts people to MLM is the dream of earning millions as income without having to invest anything but one’s efforts and time and without having to sacrifice one’s career or other priorities of life.

Characteristics of Network Marketing

Some of the important characteristics of network marketing are as follows:

Low Cost

Cost for starting, running and managing a business is very high like taxation, registration of a new business, monthly overhead, documentation, administrative expenses and so on.

Even starting a business with a very low budget through this model, you can compete with the other global multibillion-dollar businesses like McDonalds. Amazing, isn’t it?

Flexibility

Time flexibility is the most important feature of the multi-level marketing business. Time flexibility provides you an opportunity to learn and grow while keeping your financial side secure until your business is fully established.

People with families and having no business experience use this approach. They become very successful businessmen with the passage of time.

Self-Accountability

As the Network marketing is a non-salaried based business, which means the more you contribute, the more you’d earn. It’s a platform that trains people to be self-accountable of their own performances.

Organizational Hierarchy

The hierarchy of network marketing is very systematic. Like you’d only receive your commission when you recruit a new member who will work under you. However, the new member would only get his commission, the same way when he would also recruit other people. That’s how a link or chain is established and system of hierarchy is developed.

Direct Sales

In direct sales product goes through a chain of distribution and then finally reaches the consumer.

Through this model of network marketing, there’s no channel involved, sellers are non-employed people who receive their commission when the product is sold over time

Examples of Network Marketing

Amway

Amway is a short form of ‘American Way,’ a global American company; it’s been in the direct selling and MLM business for the past 60 years with the estimated revenue of 8.8 billion US dollars. Its products are beauty creams and cosmetics, medicines and home care. Amway hires and works with affiliated companies to conduct its operations and it’s been doing it in more than a hundred countries.

Harvard Business School calls Amway as one of the most successful direct selling and MLM companies in the world.

AVON

Avon is also a direct selling and multi-level

company with estimated annual revenue of 5.5 billion US dollars worldwide. It is 133 years old and it sells products in the category of personal care, beauty, and household items.

According to an estimate, Avon sales members are 500 to 600 million people across the world in more than 100 countries

Herbalife Nutrition

Herbalife Nutrition is a global multi-level marketing corporation that develops and sells dietary supplements.

Herbalife Nutrition is a global nutrition company paving the way for a healthy, active life – making a mark globally since 40 years and in India for 21 years and counting. With our intrinsic values of top-quality and care, we offer a wide range of products that vary from weight management, target nutrition and sports nutrition. 

Cheers…

Author: Vimal Singh

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