Networking marketing is the latest buzz in the marketing arena. You might have come across many people talking about network marketing and how it has helped them earn great money. If you feel tempted to get in to networking marketing business listening to the people’s stories and want to earn some quick money, you must understand the concept of networking marketing.
What is network marketing?
Network marketing is a relatively new business model that is based on marketing/distributing company products/services through a network of independent contractors. Network marketing is also popularly referred as Multi level Marketing (MLM), tiered marketing or Affiliate Marketing. Simply put, in network marketing, the company utilizes independent representatives to reach potential customers that the company would not reach through conventional offline or online marketing methods.
To accomplish the company’s sales, the company recruits individuals i.e. their sales force. This sales force is the group network marketers.
Network marketing business model functions in a similar fashion as franchising business. As a matter of fact, several big Network marketing companies refer to their business plans as ‘Private Franchising’. In network marketing all the individual representatives are Independent business owners (IBO), who market the company’s product/services to customers of their own.
One of the prime reasons that has made network marketing so appealing is that the business allows Independent business owners to not only sell the products or services to retail customers but also allow them to expand their business by recruiting others in their business. This recruitment of people in your network marketing business is referred to as ‘Sponsoring’. Sponsoring other people in the business allows IBO to gain additional income from their business. Independent business owners not only earn from their direct sales to customers but they also gain a part of other profits as well from the sales of the people they sponsor.
How is network marketing beneficial for company?
Why do networking marketing companies don’t use Internet or other marketing methods to promote their products and recruit IBO to do the same? The answer is quite simple; the networking companies use the IBO network (friends, family members) to promote their products on a wide scale. The companies need not spend huge sum for advertising on Internet, Print and Broadcasting mediums. Instead they use the people to promote their products which is a much cheaper source.
Also, research have suggested that word-of-mouth marketing is a powerful and effective marketing method, especially if the word comes from the person whom you know and trust. Besides, marketing through word-of-mouth add a personal touch to marketing.
The success of network marketing depends on the marketer’s ability and skills to influence people to subscribe to products you are promoting. It is essential to identify the people who would be interested in buying the products/services you are promoting.
Today, network marketing companies offer wide array of products/service for marketing including Nutritional Products, Weight loss programs, solar power equipment, fitness products, water filtration systems and many other items.