What does Network Marketing stand for?

What Network Marketing means?

In order to explain what Network Marketing stand for, I would like us to understand the meaning of the two words in Network Marketing, that is “Network” and “Marketing”.

According to the free online encyclopaedia, Wikipedia, Marketing is defined as the process of communicating the value of a product or service to customers, for the purpose of selling that product or service. And “Networking” is a socio-economic business activity by which groups of like-minded business people recognize, create, or act upon business opportunities.

Therefore “Network Marketing” means the process of sharing the benefits of a product or service by a group of like-minded business people to consumers in order to sell that product or service to them (customers).

An Old Business Model – Network Marketing

One interesting fact you have to know about network marketing is that; it is one of the oldest business models that existed and it is still very much in use in our world today. 

So, if this is your first time of hearing about network marketing, then it is something that you can do and in fact you do it every day. Example you buy a box of chocolate from your favourite shopping mall and after eating the chocolate you realize how nice and sweet it tastes; right away you will tell a friend of that brand of chocolate and how sweet it was when you ate it. It is the same thing with network marketing, you recommend a product or service to a friend or someone you think may be in need of that particular product or service and then the person buys the product or service from you and that is it, you have started network marketing.

How does Network Marketing work?

First, you need to join a company and pay for the rights to sell its products. Please note that when you pay for the rights to sell the products, sample products are giving to you to use or sell to new customers. Then, you build your business and grow your income by active marketing of the product, however, you can also earn money by 'sponsoring' someone to join the company and earn override commissions on whatever he or she earns.

Well, the truth is that there are many strong companies out there that have network marketing as its business model. A few examples of such companies are Forever Living Products; Trevo; Tupperware and others. However, side by side with the success stories, there have been many major failures in the industry, provoking people to cry that network marketing is a 'scam'. This is one key reason why you need to do your research on a company, its products and pay-out system before signing up. You also have to do due diligence on the level of competition for its products and the traits of the end-consumers.

The network marketing companies that have come and gone quickly had pay-out systems that benefit only its up-line members and have no actual products to sell. Therefore, if someone approaches you for a network marketing opportunity, make sure the company has quality products that already have a ready market to buy the products. In this case, Forever Living Products, Trevo, and Tupperware are classic examples of network marketing companies that have lasted over decades now and they are still going strong.

Again, analyse the pay-out system for any possibility that the company might fold because it is over-paying its members. There are many companies that started out with good intentions and high pay-outs, only to fold up because the members were earning through the membership fees of their down-lines rather than selling actual products to real people.

Also, you must take note that the most successful people in this business are the people with the most numbers of down-lines.  Therefore the first thing you must do when you start is to look for people who are hardworking and have networking skills to go with it. Remember that you may only need two people, at least in the beginning. (If you have five (5) it is better but not a must).  

In addition, the good thing about network marketing is that you own your business and you can manage it at your own pace and time. There are persons who relate it to franchising; only that the start-up costs are really low and it is possible to earn passive income from it for life. However, franchises like McDonald's do not have a system where you can earn override commissions or bonuses if you 'sponsor' or ‘recruit’ someone into the business.

In a nutshell, becoming a part of a network marketing company can be one of the most profitable things you can do. However, you must do your research and pick your company well. You do not have to join a company just because your friends or family members are there. Instead, you should take the time to really analyse the potential longevity and profitability of a company before committing yourself to it. The last thing you want to do is to join a new company, only to see it fold up after a few years because it was over paying its members and not selling anything to consumers.

I hope this post helps you to understand what network marketing means and the various parts there is to it.

Mercy Love is a blogger and an Independent Forever Business Owner for Forever Living Products, an American Company that allows you to start your own business for free. Get started with your own Business where you make money promoting the best aloe products in the world and earn 15% to 30% commissions following FLP’s proven marketing plan. 

To find out more about how to make money as a Forever Business Owner promoting the best aloe products in the world, visit ForeverLivingProducts today.