What Is Network Marketing?

What Is Network Marketing?

Network marketing, which is also commonly referred to as multilevel marketing (MLM) or consumer-direct marketing, is an all-around business model that relies on person-to-person sales of a company’s product or service. In most network marketing businesses, individuals get a commission from each sale and are required to build their network of customers and salespeople. They are compensated for their sales as well as for their team sales. While this business model is sometimes regarded as unsustainable or sketchy, there are many well-known brands, such as Mary Kay or Amway, that utilize network marketing to boost their sales.

There are different applications of network marketing. However, almost all of them include direct sales, networking, and commission-based payments. So now let’s dive into its’ most common approaches and fundamental qualities.

how network marketing works

How Network Marketing Works?

There are two sides of network marketing, the business, and its independent distributors. Businesses always look for ways to expand their customer base, and sometimes they utilize independent individuals to sell their products. These individuals use their skills and network to sell the company’s products or services, most often with commission fees.

To make things more engaging, businesses use sponsoring models. Sponsors recruit other distributors to have another commission from their sales and provide them with the necessary education. Businesses usually offer a small product package for beginners with promotional materials as a starting kit. Then they can start their network marketing journey with help from their sponsors.

There are three types of network marketing, which can be broadly categorized as:

  • Single-tier marketing
  • Two-tier marketing
  • Multilevel marketing

With the single-tier type, you make sales directly without a sponsor, and you can’t recruit other individuals. Two-tier is the sponsorship system that enables distributors to earn money in addition to direct sales from their recruit sales and affiliates as well. Multilevel network marketing contains more tiers, also with incentives to recruit more distributors.

tips to become a successful network marketer

Tips to Become a Successful Network Marketer

Most network marketing sales are made in person. So it is somewhat a requirement to be a natural people person. If you believe that you are, you can check these below-listed tips to make your networking marketing venture a success.

Stay away from illegal pyramid schemes

It is crucial for you to do your own researches while choosing a company to work with. You should know how long does the company is active, its members, market volume, product reviews, legal status, business model, and more.

It is especially possible for you to identify a pyramid scheme by looking at the business model. If the business doesn’t have a reliable product range or requires huge investments without any sensible return model, it is quite likely an MLM scam.

There are many reputable companies that use independent distributors. You can consider them first as your home-based business opportunity.

Find a product you trust and love

Even if a product promises a huge potential income, you shouldn’t jump right into it. If you don’t trust the product, you can’t make high amounts of sales. You should find a product that you find exciting and will use in your life.

Identify and engage with the target market

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Your family, friends, or colleagues is not going to be enough for you to make your MLM business a success. It is crucial to identify your target market and reach out to them. You can conduct online searches, follow relevant social media pages, and analyze their members. After you come up with a list, you can start sending out messages or emails.

If your products are meant for a large customer base, you can basically talk to anyone about them. You can have neighbor or hobby class gatherings to sell your products and also to enjoy life.

stick to your business plan everyday

Stick to your business plan every day

Network marketing is not as easy as it sounds. It is vital to come up with a business plan with daily scheduling. You can set yourself monthly goals and plan to surpass them.

As to Conclude Network Marketing

Network marketing is a direct sales model that many businesses and individuals use. Almost all applications of it utilize commission-based sales with varying recruitment types. In this article, we covered different network marketing types, including single-tier, two-tier, and multilevel ones. If you are into marketing and want to learn more, here’s our guide on inbound marketing.

Frequently Asked Questions

There are many home-based businesses you can make money from. Network marketing is one of the best ways to earn money from home.

Network marketing is a legal business. However, it is crucial to have a business plan and work with a reputable company to stay financially safe.

Students can benefit from multilevel marketing greatly as it is a home-based business with part-time working opportunities.

While having an extensive network can give you a head start, it is not a necessity at all. You can come up with creative methods and join networking communities to sell your products.

Most network marketers start their career as a part-time job. If your income grows with a sensible financial foundation, you may start thinking about quitting your full-time job.


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Since his early years, Harold has been studying the inner workings of different digital environments.


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