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How Network Marketing Works


In today’s digital world, people have more and more opportunities to make a living while self-employed and working from home. In fact, the Bureau of Labor Statistics reports that there were approximately 9.6 million self-employed workers in 2016 alone. Many of these people have discovered the potential of network marketing.

Also called multi-level marketing (MLM), this type of business model involves independent contractors earning commission by selling products for a company. They can then start building a network of members to sell products, thus increasing their commission.

There are a few misconceptions surrounding network marketing. The most common is that it’s nothing more than a pyramid scheme. However, there’s more to it than that.

If you’ve heard about this exciting business opportunity and have been thinking of getting involved, keep reading. We’re breaking down exactly what network marketing is and how it works.

Network Marketing vs Traditional Marketing

Comparing network marketing to a traditional marketing model is a great way to get a bird’s eye view of how it works.

Traditional marketing involves a supply chain that includes the following components:

  • The manufacturer
  • The distributor
  • The wholesaler
  • The retailer
  • The consumer

Under this model, a product must travel through each party to reach the buyer. This can result in added costs to the consumer and complications along the way. 

Network marketing, on the other hand, drastically streamlines the supply chain. With this marketing model, the wholesaler and retailer are eliminated. 

This model has allowed for the development of network marketers who work as the distributor. They earn a commission off product sales and can then on-board marketers to increase their earnings. The more recruits they bring on, the more money they make.

The Basics of Building a Network

If multi-level marketing sounds interesting to you, it’s important you educate yourself on the process before taking the plunge. Network marketing is a great way to earn either a primary or secondary income. However, it’s a lot of work.

Many people get started with network marketing on a small scale and end up owning their own company. It simply takes hard work and a passion for learning new ways of marketing and selling products.

One of the most important things to keep in mind when getting started is that this is a process. Instead of trying to make tons of cash right away, it’s better to build your network from the bottom, up.

Decided on a Product Line

The first thing you’ll need to do is decide on which niche you want to concentrate on. This will be the type of product you end up selling.

A good rule of thumb is to choose a product or service you have preexisting knowledge of. Or, choose something that’s not too complicated to learn.

Many network marketers work within the health and wellness industry. This makes sense, as there are a large number of products on the market, all of which are in high demand.

Picking a product you can stand behind is important. Remember, you’ll be promoting them, so it helps if you believe in their value.

Get Recruited by Another Marketer

Once you’ve decided on a niche, you’ll need to look for companies within that industry that work with network marketers. It should be easy to find other marketers to recruit you.

It’s important you learn as much as possible from the person who recruits you into their market. Think of them as your mentor. They can show you the ropes and give you invaluable advice for succeeding in growing your own network.

Create a Plan of Action

Any successful business requires a thorough and effective business plan. The same thing applies to network marketers. In fact, you should start thinking of yourself as a business.

Start by defining your target audience. This will help you decide how to market to them. According to The Balance Small Business, defining consumers should be based on several factors including:

  • Demographics
  • Socioeconomic attributes
  • Geography
  • Generation
  • Product usage

You’ll also need to decide on how you plan to advertise your products. Many serious network marketers build a dedicated website to promote their business. You should also plan on utilizing social media as much as possible.

Start Reaching Out

Once you’ve established a solid foundation for marketing your product, it’s time to start putting the word out. When doing this, it’s better to focus only on potential customers or people who you can recruit. Casting a wide net isn’t the best approach.

A great way to make connections is by attending marketing events in your city. These are relatively easy to find and take place rather frequently.

Have a business card handy for these events and make sure you’re connecting on social media as well. This is a great way to sell more products and meet people interested in becoming a network marketer underneath you.

Advantages of Network Marketing

Many people who get into network marketing do so for two reasons – income and freedom. This business model offers driven individuals a way to work independently and achieve the life they’ve always dreamed of.

Although you’ll need to work hard, especially at the beginning, you can choose your own schedule. No more adhering to the nine to five mentality.

Becoming a network marketer also means you get to choose who you work with and what industry you become apart of. Plus, because so much advertising is possible through word-of-mouth and networking, you don’t have invest too much in marketing channels.

Finally, one of the biggest advantages is that when you establish yourself, you’ll start making higher commissions without having to sell the product personally. The larger your network, the more money you’ll bring in. 

Take the Leap and Become a Network Marketer Today

Are you tired of your day job or just want to make some extra money on the side? If so, network marketing may be just what you’ve been looking for.

It may seem like a lot of work to begin with, but once you’ve done the initial legwork, you’ll be able to expand your network and enjoy increasing returns.

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