What is Network Marketing? It's Pros, Cons With Examples
In the business sector, there is the pivotal pillar of marketing. Marketing is a component of business that is determined by the type of the business, it's target audience, it's goals and objectives.
There are various models or strategies of marketing, which can be used alone or in conjunction with other compatible marketing strategies. It is best practice to adopt as many marketing strategies as you can afford. Key word is to adopt those that you can afford both financially and with human capital too.
I'm sure you've probably heard about network marketing, worked for one or bought products from one.
Network marketing is a multilevel marketing strategy where a company recruits an independent workforce of passionate sales personnel. The recruits are known as distributors and are not payed salaries. The distributors sell the company's products through direct sales and in some cases are allowed to recruit their own distributors known as down lines.
How it Works
Basically, in Network marketing there are tiers or levels on a pyramid. At the top of the pyramid is the company or business owner. The next level is the first tier which constitutes the top distributors who have other (tiers) distributors under them (downlines).
How Do You Earn Money?
A distributor for a network marketing company earns money via two ways:
Does network marketing yeild good Profit? Yes, but mostly for the business owner and top distributors. As a distributor, if you have a large enough network (downlines), you can make millions off a network marketing business.
A lot of people have made millions of dollars off network marketing, currently, the top earner from network marketing globally is Igor Alberts & Andreea Cimbala under DagCoin - Success Factory. With an estimated annual income of $21,600,000.
Some very popular and good (though some have been sued a number of times) examples of Network marketing businesses include:
Amway is one example of a network marketing business that has been sued more than once for a myriad of legal issues, mostly fraud.
Amway is a network marketing company founded by Jay Can Arnold and Richard DeVis in 1959. It primarily sells health, beauty and home are products through its distributors. It is head quartered in Ada, Michigan.
These are just a few among many examples of Network marketing companies such as Longrich, Tasly and so many others.
While basically, Network marketing is a viable and legitimate business model, it is often used as a cover for pyramid and ponzi schemes.
As a result of this, this model of marketing and business is banned in some places such as China and Dubai. Some companies have found a way around the ban by connecting to distributors and recruits online.
So, before joining or signing up for any network marketing business, do proper research and confirm that it isn't a Pyramid scheme so you don't lose out on the end.
Ways you can raise capital to finance your great ideas include partnership, fundraising, loans, friends and family support. When finance becomes a big deal, there are some little businesses you can start with less capital.