Network marketing is also widely known as “Multi-Level Marketing”. This is an effective business model that depends on people who are enthusiastic about selling products. The model works on a commission basis. This means, for every product sold, the seller gets a commission. The only way to make more money through this model is by networking as much as possible.
Network marketing has two important stages:
- You have to sell the product you are marketing
- You need to find recruits, who will in return sell the product. With every successful sale, your recruit makes, you will get a commission
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According to experts, network marketing forms a pyramid of participants. People on the top of the pyramid will make money when people below them sell. Doesn’t this sound simple and interesting? Well, Network Marketing has been around for generations. And, it has become famous and widely spoken in the past few years.
Qualities of Network Marketing
Just like every other marketing philosophy, this strategy has few intuitive characteristics.
Organizations that depend on network marketing need to sell products directly. The sellers cannot rely on any other form of distribution. It is the sole responsibility of every individual in the pyramid to advertise and sell. The products should be sold to people outside the pyramid. And, as mentioned previously, the seller gets a small commission with every deal.
All sellers in the network marketing model are known as independent business owners. It is their responsibility to promote the product and develop their business. This means every participant needs a unique selling strategy. Through network marketing models, you cannot build healthy relationships. This is because everyone in the model is connected through profits and money. Some people can even trick others into the business. Thus, network marketing is a tricky and challenging form of business. In the long run, this kind of marketing will turn into a big hierarchy within organizations. However, not all businesses need this marketing method. Only those that have less or no advertisements will find it useful. That is because products with minimal advertising can only be sold through word of mouth.
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Network marketing has a fair set of benefits and drawbacks. For example, people in this industry don’t have fixed salaries. They make money only with successful deals. This is what makes network marketing very challenging. As mentioned previously, this is a pure commission-based job. Participants are not employees of the company. And, they are not paid any salary but commissions for the tasks accomplished.