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In the business world of today, marketing is
perhaps more important than ever before. While traditional means
of marketing continue to be popular in several areas,
alternative marketing methods are becoming increasingly popular,
particularly for businesses which are seeking to establish
themselves.
One business distribution model – a method by which word of a
business and selling of the products a business has for sale –
that appears to be working well today is the idea of network
marketing. In this article, we will take a look at what network
marketing is and how it works.
Network marketing
Networking of all kinds is popular in the cyber age, and whether
we are talking social or sales, the idea is the same: using
connections that are already in place, an individual (or
business) creates a wider web of contacts through connections
that their connections have. It operates along the same way our
social lives do; a friend you know from work invites you out
with some of their own friends, and at the end of the night you
find (hopefully) that you have met a couple more people with
whom you get along.
When it comes to network marketing, the idea is to have the
contacts sell a specific product. A parent company will start
out with an idea or a product that they wish to sell, and will
recruit individuals to do so. These individuals will receive a
percentage of the sale of the product every time they make a
sale. In addition, they may recruit other individuals to sell
the same products, and they will receive a percentage commission
every time the individuals they recruited make a sale as well.
Isn’t that a pyramid scheme?
Most people will have heard of a pyramid scheme, and may think
network marketing operates along the same lines. However, there
is an important difference; in network marketing individuals are
paid only for actual sales, not for recruiting. The money
changing hands, in other words, is real money made from sales
(in a pyramid scheme, fees are paid for recruiting, but without
sales to match recruitment, companies would often renege on
payment due; this is why they are for the most part illegal).
Obviously, network marketing works very well the higher up one
is on the sales chain. As more and more people are recruited,
the commission fees will drop considerably. If you are looking
into getting involved in network marketing, therefore, it is
important to know where in the chain you are coming in (although
thanks to the Internet, there is a customer and distributing
recruitment base that is virtually limitless). Employed
correctly, network marketing can mean huge profits for parent
companies and individuals alike. |
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