Category: Network Marketing

Network marketing is becoming a popular marketing trend these days. This article covers what is network marketing. We also discuss its scope along with advantages and disadvantages.

The scenario of network marketing was at its climax in the last decade. Network marketing, multi-level marketing, cellular marketing, affiliate marketing, referral marketing, home-based business franchising, and consumer-direct marketing – all are of the same phenomenon.

The simplest definition of network marketing is – a business model that requires a distributor model to make a business flourish.

Network marketing companies mainly pay their associates for linking more and more people to their business plan and partially for selling a product and earning profit margin. Such companies enforce direct selling where the product is directly made available to customers without any middlemen or retailers.

Customers can also register within the company as sellers and start earning money by recommending the company’s products to their network or making people join the company’s business plan.

The motto behind network marketing is to help an energetic and hard-working person with business potentialities and a negligible amount to invest can make a big profitable business. It is otherwise, called ‘Pyramid type of a business’.

In which Sectors Does Network Marketing Flourish?

1. Health and Wellness
Industries dealing with health and wellness products prefer mostly direct sales and network marketing. As day-by-day, people are getting more health-conscious and try to have a younger look, the health and wellness related products are becoming popular and exhibit niche among masses.

Health and wellness products consist of ingredients concerning natural herbs and thus, are called alternative medicines. They have a wider appeal to the public.

2. Cosmetic Products
Looking good has been a dream of all. Industries dealing with makeup and personal care products adopt network marketing policy for getting popularity and building up a brand. This is the age of beauty influencers and lifestyle vloggers who love to recommend a suitable product to their followers and earn a commission in return.

Types of Network Marketing

There are three types of network marketing models;

1. Single-Tier Network Marketing
This is another version of affiliate marketing. It is a simple business strategy where the commission is directly earned by the affiliate when he/she sells a product through his/her reference. Here, the person isn’t supposed to recruit anyone beneath him/her to work.

2. Biennial System or Two-Tier Network Marketing
Here, the selling agent not only sells a product or service but also recruits selling agents under him/her to sell the same up to two layers. In this segment, the selling agent is paid for direct sales by him/her and indirect sales through the recruited agents.

3. Multi-Tier Network Marketing
This type encompasses a marketing strategy that runs multiple layers deep. A selling agent can recruit an unlimited number of agents to work under him and thereby, help create multiple numbers of down layers. As a result, the salesperson at the top gets some commission on sales made by the salesperson present at the bottom.

What is the Scope of Network Marketing?

Network marketing is a group activity. It is the only business where both time and money freedom can be achieved. A selling agent is his boss and sets his own time and strategy to get successful. But, joining and getting successful in network marketing depends on certain aspects. Firstly, to be a successful marketer, choosing the right company is important. Secondly, the brand name of the company speaks a lot.

Third, going through the quality of products and services is very essential like the safety of products and their prices. Finally, the category of product or service, intended market to expand the business, time one can spare, and future goals like getting rich or making some extra money are a few important things to become a successful network marketer.

Advantages of Network Marketing

1. Cut Down Marketing and Promotion Costs

The traditional marketing methods included newspapers, television advertisements, or billboards. Let’s move to some more advanced marketing tactics that included Facebook or Google ads, promotion through blogs, and Youtube videos. But network marketing is a revolutionary method that turns individuals into promotional assets.

In other words, a company’s customers are its advocates who promote products to a bunch of people and earn a handsome amount of money in return. This is a comparatively cheaper mode of marketing. Plus, it’s a win-win situation for all.

2. Rise of Solopreneurs
Solopreneurs are entrepreneurs who don’t have a team and handles everything by themselves. Networking marketing has given many people to live their dream of becoming an entrepreneur even if they belong to some other profession, initially.

3. Generating extra income

Another bright opportunity that lies within the ocean of network marketing is the generation of extra income streams. People can work part-time or full-time on this model as per their choice. Who doesn’t love to make extra bucks? This is the reason why network marketing emerged as a highly successful framework.

4. No degree required

Just anyone can get started with network marketing irrespective of gender, religion, age, and educational qualification. If you are unable to land up to six figures salary due to your lower qualifications, you still have a chance to earn six figures a month by learning the strategies of network marketing.

You just need to have a good network of friends and good communication skills to convince people. This is a great thing indeed!

Disadvantages of Network Marketing

1. Risk of fraud

Some of the network marketing companies turn out to be fraudulent. The products they sell are also not reliable.

They simply exploit their customers without giving them any profit share. You must be beware of such scams. Always visit the company’s website and read about their reviews on google. Know the history and reputation before registering in any such scheme.

2. Lack of Professionalism

Individuals who are involved in promoting products of companies are not much skilled. They might end up establishing a bad image of the company in front of other customers.

In the case of network marketing, a single unsatisfied customer leads to losing numerous other customers.

3. Lack of trust

Lack of trust is a common drawback of this marketing version. People haven’t heard or seen the company’s name on any social media platform, only individuals are seen promoting products. Therefore, they find it hard to trust the products. Lack of awareness hinders frictionless sales.

Final Thoughts

Network marketing is a less expensive way to promote your products and build up a brand. But, like any other things, it too has its pros and cons.

Nevertheless, if you have created a good product which really solves problems of your consumers, no one can stop you to be successful. People will eventually love talking about your products. A great product that is reliable and genuine will definitely boost up sales through network marketing.