You may have heard of the term Network Marketing. Though you may have encountered some variation or form of it as people connect with others.
It usually results in a new prospect for business or a new client. Establishing networks and using those connections is what this method is all about.
What is network marketing, exactly? Today, we will look at how this works and how you can use this to your advantage. We will also look at its pros and cons to give you an understanding of this form of marketing.
What is Network Marketing and How Does it Work?
To put it simply, network marketing is a business model. It involves a variety of methods.
Its gist boils down to person-to-person transactions. Within these transactions, you have lead generation or sales occurring.
A business that operates on network marketing would have a network of business partners. These happen to be the individual marketers engaged in this setup.
This works great for people with high energy and strong sales skills. Those who can build a business that can yield a lot of profit with a modest investment.
Something to remember about network marketing. It can come in either a single-tier or in multiple tiers.
Each of these setups operates differently. Even so, it would still work as a viable approach for a business. Especially one that uses a network of representatives and their connections.
Network marketing comes in a number of names. You may have heard of multilevel marketing and affiliate marketing.
These follow the same setup that network marketing takes. In this case, utilizing connections between representatives and clients.
How It Works
How this works is that the model creates tiers of salespersons. Depending on the arrangement of the tier, these salespersons would also get a network of representatives. Said representatives conduct either sales or creation of another tier.
With this, you end up with the upline and the downline. To define this, representatives of a tier below you are the downline. Meanwhile, those who are of a tier above you are the upline.
As a business, you gain profit from the successful sales that you close. On top of that profit is a commission that the downline provides to the upline. In this case, you would receive a commission from your downline in case you have one.
To note, single-tier networks tend to have a more reputable business when compared to those with multiple tiers. It is due to the downline-upline situation that you would note this observation. You would also notice how different network marketing is when compared to pyramid schemes.
The Pros and Cons of Network Marketing
As a business model, network marketing has its pros and cons. Noting these details can help you gauge if it is the setup you wish to go for.
Advantages and Pros
To start, let us look at the advantages. The good thing about network marketing is that it gives you a good starting point. It helps with making ends meet when stuck in that career transition or unemployment.
It also gives the opportunity to share about a product or service that people find passion in. Through network marketing, they could advocate about it and push with selling the product or service to other people.
Another interesting advantage of this is that it also frees up your schedule. It provides you more time to be at home. With the proper setup and connections, you can also leverage your finances even after spending the same amount of time and effort in setting up your team.
As for growth, there is room to facilitate and contribute by mentorship. This is actually a key component in that growth. For this, you get assigned to a sponsor who helps you grow as a representative.
Disadvantages and Cons
As for the disadvantages, it takes time for one to grow in this line of work. You have a lot to work on to build yourself up through this approach.
As for marketing sales, they occur on a face-to-face approach. First-timers might find this challenging and hard to work with. The result for that ends up with these representatives selling the product to their families.
Then there is also the portion about the rejection that goes with it. It has a high rejection rate that those who don’t persist would find themselves giving up on the first day.
In some situations, it is hard to note if network marketing is a legitimate business or a scam. The best way to note the differences is with the presence of the product. When you see something tangible, it is a legitimate business.
Scams provide a lot of bad rep for network marketing as it uses the same method and approach. When you don’t see a tangible product and it only provides information, that’s when you know the venture is a scam. This leads to the alienation that would dissuade any possible hope for a network venture to flourish.
Things to Note Before Joining
What is a network marketing professional? After noting how network marketing works, professionals within this field work out as sales representatives. You build the business through connections with which you conduct sales.
Before joining, take note of the methods used by the business you plan to jump into. For instance, check if the network marketing operation plans to profit through the sale of products or through recruitment. Also, check the track record of the company’s founders.
When checking the products, see if it is something you would get excited about. Also, check if you know people who would want those products.
These considerations can help you decide if it is worth going for. If you managed to determine that they offer a great opportunity, go for it and sign up. While doing so, make sure to ask questions.
Understand What is Network Marketing Today
After learning what is network marketing, you can also see if it is the right business style to go for. Ask questions and learn what you can about the company that offers it. This way, you know that it is a good fit for you.
You can even learn about what else network marketing can do and how you can push with it in a work-from-home setting. Contact us today for questions that you have about network marketing.