What is network marketing?

Definition and Features

What is network marketing? Network marketing is one of the smartest types of marketing; It is tantamount to making circles and layers of distributors and salespeople, and each circle creates another circle after it, without much cost to the company that owns the main product.

The intelligence of network marketing, then, lies in the fact that it is a “reward for distribution.” Whenever the product is distributed on the widest scale, the distributors get a share of the profits, and then we are faced with a winner-takes-all equation, and that is the secret of the intelligence of this marketing strategy, in addition to bringing Everyone to the table, at no cost to the company.

What is network marketing?

This is a difficult question to answer; Because in marketing, as in any other field, there are many schools, and each school has its own perspective on this or that issue. Of course, definitions are understood to be limited, but it is not a requirement that the limits always be clear.

In any case, we shall here adopt the most popular definitions agreed upon by a large body of experts; Where network marketing is viewed as a business model based on personal sales by independent representatives, network marketing business may require building a network of business partners or sales representatives; To help generate leads and close sales.

Network marketing is known by a variety of names, including multi-level marketing, cellular marketing, affiliate marketing, direct-to-consumer marketing, and referral marketing, also called “multi-level marketing”.

A company that has a product or service to sell, finds representatives to sell that product and recruits more representatives to expand the network; So that reps get a sales commission on every product they sell, and on every product sold by the people you’ve recruited as well.

So, network marketing is the distribution of products and services; Through a network of people, not through traditional supply chains.

The skill here lies in creating the own network in which everyone has the ability and willingness to sell and distribute the product. Of course, both things are difficult: selling the product itself and recruiting other salespeople who have the ability to increase the rate of product sales.

It is true that many view network marketing as a good job for those who want to work part-time, but the effort put into it is really big.

Reward for distribution

The simplest perspective from which we can look at network marketing is to say that it is a strategy based on ‘reward distribution’, or the strategy of rewarding distribution; So that the company rewards everyone who distributes its product.

The percentage of profit obtained by the salesperson involved in the network marketing process is directly proportional to two factors: the percentage of sales themselves (as the main factor), as well as the recruitment of other people to sell the product; Every sale is made by someone you recruited before, and you will have a share of it.

Hence, the sales rate is the basis for determining the percentage of profit that you will get through network marketing.

Hence, it can be said that the philosophy behind Network Marketing can be summarized as follows: Instead of spending millions (or billions) in marketing and advertising its products through major media (TV, radio, billboard ads, newspapers, magazines, etc.), it Simply rewards people for distributing those products via referral, word of mouth.

Key Features

I might not dare to say that network marketing is a form of passive income; Especially if you manage to recruit many people who work for you, and then for the company. But it is, albeit in a mysterious way, a type of passive income even if the approach seems a little distant.

Apart from that advantage that is far or that not everyone involved in the network marketing process will be able to achieve it, the main advantage frequently mentioned in the marketing literature is that network marketing is low investment.

So, as someone who wants to take this course, you are only asked for a small amount of money to buy some samples of the product that you will sell later.

There is, of course, a risk: you can lose the money you paid for these samples of the product you bought, and then you will lose the money you paid, but even if this happens, the amount of money you will lose will be small; As the principle of things is that you buy a sample (a small amount of the product) and therefore the amount of money lost will be small if we assume that you fail to market even this limited amount of samples.



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