Network marketing is a marketing strategy based on the distribution and sale of products through individuals . It has been around for many years and can be a great idea to take advantage of the power of “word of mouth” and save costs on sales representatives. But what is network marketing really all about and what are the keys to doing it well? We’ll tell you in this article!
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How network marketing works
Network marketing is a model based on the direct marketing of products or services between the seller and the customer. In turn! the customer has the option of becoming a seller! forming a distribution network that grows and incorporates new members.
In multi-level marketing there are no intermediaries such as stores and shops! and the idea is that those who have already tried the product or service and have had a good experience become the main america phone number list sellers. In a very brief way! this system works in three steps:
- Recruitment : Distributors themselves are responsible for recruiting future distributors so that a distribution network is gradually created. Once this network has grown sufficiently! different levels are formed.
- Direct sales : distributors sell products or services directly to consumers. They are responsible for the work of a salesperson and also for managing everything related to ordering the product or reserving the service. Sometimes! they even perform marketing tasks.
- Commissions : Distributors do not receive a fixed monthly salary! but rather receive a portion of the sales they make. In many cases! they also receive a percentage of the sales achieved by distributors they have recruited! which creates an incentive to attract more distributors to the network.
Network marketing emerged in the United States in the 1940s and is used by well-known brands such as Avon and Tupperware. Traditionally! it was a model based on word of mouth! in which sellers for example you can identify sold products mainly to their family and friends. Today! this model has evolved thanks to the emergence of digital marketing and sellers use channels such as social networks or email marketing.
Pros and cons of network marketing
Pros of network marketing
- Thanks to the emergence business model of digital marketing! network marketing has expanded its potential reach ! moving from relying on word of mouth to reaching thousands of china phone numbers people through a single salesperson.
- For retailers! network marketing can be a very attractive way to increase their revenue ! although the brand needs to be very honest about it and not create unrealistic expectations. On average! the profit margin for products is around 35%.
- This way of working also gives distributors a lot of flexibility ! as they can set their own schedule and work from home if they wish.
