What is Network Marketing, MLM and Direct Selling?

Network Marketing


Multi-Level Marketing, also known as "Network Marketing" worldwide, is a growing trend. It is very appealing for people from all walks of life to attempt to join the network because anyone can become a Distributor and earn money from building the network without sacrificing any other occupation or additional investment in this business. 

According to estimates, network marketing accounts for over 70% of direct selling revenues in the United States alone


"Although no national revenue figures are available, it is estimated that over 50 million people worldwide are involved in Multi Level Marketing"

 

History of Multi-level-marketing or Network Marketing:

Although there is no documented history of multi-level marketing, it is generally believed that food supplement manufacturer "Nortrilite", formerly known as "California Vitamin Company", introduced the idea.

The company once engaged in direct selling in the early 1940s, when distributors discovered that they were increasing the company's sales by introducing their friends to Neutralite business opportunities. At that time there was no system in place to recognize and reward distributors for their efforts in recruiting additional distributors to the business. The distributors and the company realized that the system of giving a 2% bonus to the sponsoring was working on the distributor's sales and introduction to the network that he sponsored or built.

The result was the development of the current "Pyramid Selling" method.

Due to the rapidly expanding network not only in the United States but also across other continents, Nutralite experienced unprecedented growth and profits over the subsequent decades. 

"Richard DeVos" and "Jay Van Andel", both distributors of Nutralite, separated in the early 1960s to start their own business, which they named "Amway," and it became the largest MLM company in the world. After beginning with "household and cleaning products", this company later acquired Nutralite Company and include "food supplement products in its portfolio".

There are currently hundreds of businesses that use "multi-level selling", "pyramid selling", and other methods of remunerating to sell their products. Using this sales model, numerous brands, including "Avon", "Tupperware", "Electrolux", "Discovery Toys", "Herbal Life", "Kleenez", "Oriflame", and Reliv, have grown their businesses globally with great success.

What is Network Marketing or Multi-level Marketing?

The idea behind network marketing is that sales are done directly to customers through individual representatives. Businesses that use MLM (multi-level marketing) recruit independent agents to sell products and services. To work on lead generation and closing, businesses need to build a strong network of partners and salespeople.  

Other names for multi-level marketing include "Pyramid Selling," "Network Selling," and others. Building a network of individuals to serve as sales distributors is a component of this direct selling strategy.

The first step in selling is to locate a new network distributor and recruit them. Every distributor also becomes a buyer as soon as he starts using the product for himself, his family, and his friends. Consequently, the sales process involves both self-use and distributors who have been enrolled by the individual. 

How Multi-level Marketing or Network Marketing works?

Businesses in network marketing first look for people who are interested in their products. Companies give them products at a discount so they can sell them at full price. As a result, they use the discounted rate as their profit margin.

They reinvest money back into the business and sell a few more products to make money. It encourages more people to join your team, that's why network marketing is also called referral marketing.

People who sell products do not receive any basic pay, but through network marketing, they can earn:

  • either directly or through the sale of other members' goods.
  • They expand the chain and recruit new members.
  • They can earn more money the longer the chain is.


There are three methods for working in Network Marketing or MLM:

1. Signing up with the organization:

Most importantly, you are welcomed by somebody who needs to enroll you. After joining, you will have an agreement with the organization connected with their agreements and security strategy. After this, you approach organizations' true sites and other related stuff. The individual who enlisted you is currently your "support" or "Upline".

2. Retail Selling or Direct Selling:

In Network Marketing or MLM, your most memorable spotlight is on Selling Items. There are two choices for you to begin selling items, that is you purchase items for yourself as well as your loved ones. Here you get a rebate on each item you purchase since you are an individual from the organization. The subsequent choice is that you need to extend your Deals volume. Other than purchasing items for yourself, you additionally tell about items to your companions. This will expand your deal volume consequently and clearly, you get more commission.

3. Building your Organization or Growing your group:

The last way is building your organization. You will concentrate to enlist different people or merchants in your downline. You should begin conversing with known and obscure individuals and educate them regarding your organization and its items and administrations. After they join you as a wholesaler, you will end up being their "support" or "Upline". Here you begin procuring through your organization or group. You will get paid from the downline in the type of incentives or rewards.



Types of Network Marketing or MLM:

There are the following types of Network Marketing or MLM:

  1. Single Tier Network Marketing
  2. Two-Tier Network Marketing
  3. Multi-Level Marketing or MLM

1. Single Tier Network Marketing:

People sign up for a single-tier network marketing program, start selling the company's products or services, and get paid a commission for each sale they make. However, they are not required to hire additional sales agents to perform their duties. They can concentrate on building relationships with customers and sales.

We can use brands like Amway, Betterware, Kleeneze, and Avon as examples to comprehend single-tier network marketing. whose use of this strategy has resulted in significant sales. This method of marketing is also used by some online platforms, where users are compensated for driving traffic to the website.

2. Two-tire Network Marketing:

Companies hire people for the two-tier Network Marketing strategy. However, these employees receive compensation for more than just that. Through direct sales or traffic they generate for a website, they can be compensated. In addition, they get paid a commission on sales made by people who join the program through their recommendations. 

3. Multi-level Marketing:

Multi-level marketing, also known as MLM, involves two or more marketing levels. In exchange for a share of the margin they earn, it encourages existing distributors to hire more distributors under them. Distribution networks make up most of its foundation. When the tier gets five or more times deeper, these people also get paid.

Is Network Marketing or MLM for you?

Who wouldn't want a few extra dollars at their disposal? To achieve our long-held goals, most of us try to think of other ways to earn extra money outside of our jobs and professions. Most of us have this experience. While stock markets are preferred by some with a keen eye for numbers, many people consider taking on a second job and working longer hours. Some focus on forming a network of family, friends, contacts, colleagues, and other individuals through MLM activities.

When considering joining an MLM network, YOU should always come first. To determine how you are most qualified to take this up, you will need to sit down and consider the entire proposal. Does it align with the goals you have set for yourself in the long run? Do you have the time and energy to consistently focus on recruiting distributors and building networks over time? If you want to invest in this business, are you willing to give up time with your family, social activities, and personal time? What about your ability to sell? Do you enjoy approaching known and unknown individuals to discuss MLM business networks? Do you have excellent communication skills? You alone would have to respond to all of these questions.

No gain, no pain, goes the saying. As a result, multilevel marketing (MLM) can provide you with a fantastic opportunity to develop a secondary source of income, provided that you have the motivation, concentration, skill set, and mentality to devote a significant amount of time to developing this idea. It necessitates establishing a new and additional career with MLM selling in addition to balancing your life, priorities, and responsibilities.

Check out some special considerations before joining Network marketing or MLM:



It's possible that you just went to a meeting with a friend or acquaintance who told you about a fantastic plan called Multi Level Marketing Network. You think it's a God-given chance to make extra money. After all, who doesn't appreciate receiving additional funds each month? You're overwhelmed and worried about whether you'll be able to complete the task successfully and whether the idea is really as good as it sounds. These are merely typical inquiries that are likely to be asked by all individuals.

You will need to learn more about the idea, the company, the product, and so on before you can make a decision. Before deciding whether to say "Yes" or "No," it is essential to gather comprehensive information about the company. This will help you make that crucial decision.

Choose Products:

It is essential to select the appropriate set of products with which you would like to deal if you are somewhat familiar with the MLM concept and believe that you can take advantage of this selling opportunity. Keep in mind that MLM is a selling idea. You can pick and choose from a variety of businesses and products. You might choose a product that you think can be easily sold based on your background and contacts.

Product Detail:

Then there is the issue of determining the products' quality, which needs to be investigated. To determine the product's compliance with quality standards, you will need to review the product information brochures. To determine which product is superior or inferior to the one you have chosen to deal with, it is also helpful to identify your rivals and compare their offerings.

Before you say "Yes" to the Product, there are a few more things you need to think about. What price range does the product you're thinking about offer? Examine the market to determine whether potential customers are likely to accept the price range and easily purchase the products. What about the products' repeatability? Are the products likely to be purchased again? If so, how often can we anticipate repeat orders? Your research will not end here. Check out to learn more about the company's guarantee, warranty, and replacement policy. Also, check out the company's distribution and delivery system or supply chain. How quickly and easily can you receive product delivery from the company?

Company Detail:

If you're satisfied with the products you've chosen, it's time to learn more about the company's past and gather all the information you need to make a decision. In terms of the company's history, find out how long it has been in business, how well it has performed in the past, and what the management team is like, including its vision, plans for the future, and so on. 

More importantly, learn about their strategies, attitudes toward distributors, dedication to the MLM industry and network, and future plans for new businesses and products. You wouldn't want to work with a company that doesn't have a long-term focus, expertise, or vision in the business line. Checking the company's affiliations and memberships with trade organizations, direct selling associations, and other organizations is helpful.

Last but not least, you'll need a written copy of the distributorship's Terms and Conditions, as well as the income proposal detailing when, how much, and how the company will pay. 

With all of the information, take your time studying all of the details to see if they suit you. Then, take advice from people who are familiar with the industry before making a decision.

There are a few points that we have to consider before joining Network Marketing or MLM:

  • How long has the company existed?
  • Are their products and services valuable to you?
  • How much money is distributed among employees?
  • How trustworthy is the business?
  • Are the company's timing and momentum favorable?
  • Will the company provide training or support?
  • Was it marketed as a chance to make money recruiting others or selling products?
  • How many years of experience do the company's founders have?
  • Are the products enticing to you personally?
  • Do you know anyone excited about the products?
  • Is the product getting the attention it deserves?

"Keep in mind that this is a business and that you are your own boss and employee. You must be prepared to fail and attempt again if you want to control the situation"

How will you make money from Network Marketing or MLM:

As we discussed above that what is network marketing, the history of network marketing, how it works, types of network marketing, and some special considerations before joining network marketing, here we discuss how will you make money from Network Marketing or MLM.  

It is definitely possible, but not likely. Some people can make a lot of money in network marketing because they can get more people to join the network. There are two main sources of income: selling products and getting paid for sales made by team members in the downline. You will earn more money the more people in your downline you have, and the more people you can recruit, the more money you can make.

The majority of legitimate network marketing program participants earn little to no money. People can lose money. Some people might get involved in a pyramid scheme that is against the law and not aware that they have joined a scam, in which case they could lose everything they invested. Before jumping in, do your homework and ask around.

There are some examples of Network Marketing or MLM companies:

Around the world, there are many Network Marketing or MLM companies. Here we mention some of them; Amway, Avon Products, Herbalife, Tianshi International, Greenleaf(Zeson), Oriflame, and so on.

Now here we can discuss the advantages and disadvantages of Network Marketing or MLM.

Advantages of Network Marketing or MLM:

There are some advantages of Network Marketing or MLM:

  • Personal Branding
  • Owner of a Global Business
  • Low Investment
  • Expanding Network
  • Discussions with the Community 
  • Work-Life Business 

Personal Branding:

You are convincing people to buy the products by sharing your own experience. People buy your products because they trust you and your values. Your business will expand as more people join your network. Your network marketing success will skyrocket and be unrivaled once you use your voice to establish yourself as a community expert.

Owner of a Global Business:

You can work from anywhere you want with network marketing; To get started, all you need is a smartphone or laptop and connections. Building a network of people to meet new people, talk to them about your business, and recruit them as members of your downlink is the business of network marketing.

Low Investment:

It is not difficult to establish a network marketing company. With a competitive mindset and a small investment, you can start a network marketing business. Multi-level marketing, also known as MLM, is a business where you can make more money than you can in other businesses.

Expanding Network:

MLM furnishes people with the potential chance to acquire merchant planning and figure out how a business works. If you have a ton of reach, you can offer the items to them and bring in cash. Notwithstanding cash, it is an organization of individuals. Your organization will turn out to be greater as the organization extends.

You will get a business that as of now has a repeated site, promoting materials, and a deals tracker set up. You just have to oversee and keep up with the business.

Discussion with the community:

It is a business that requires a group of people who share similar values. The number of employees grows with the business.MLM is a business where the majority of team members and like-minded people work together. The entire network will be impacted if someone acts alone.

Work-Life Business:

In network marketing, you are completely in charge of their work environment, work culture, and how quickly you can build your business.

It is easier to succeed in multi-level marketing if a company has a solid foundation for network building and strong marketing skills. Many people choose these programs because they offer not only a good salary but also a way of life.

Why choose Network Marketing or MLM?

There are some reasons to choose NETWORK MARKETING or MLM:

  • Extra Income
  • Economic Freedom
  • Self Employment
  • Time Freedom
  • Personality Development
  • Helping others
  • Making new Contacts
  • Leaving Inheritance



How do people succeed in Network Marketing or MLM?

Here you know how people succeed in Network Marketing or MLM:



Building a winning team:

  • Connect with each other
  • All commit to a goal
  • Plan Collaboratively
  • Everyone contributes equally
  • Allocate to the natural strength
  • Support & encourage each other
  • Work fast & stay on track




How is Network Marketing or MLM different from Traditional Jobs?

Network Marketing vs Traditional Job


There is a very big difference between Network Marketing or MLM from Traditional Job.

Direct selling is a type of network marketing in which products are sold directly to customers. The fact that network marketing requires you to hire additional independent contractors to sell the product on your behalf is the primary distinction between direct selling and network marketing. As a result, you need to put together a group of people who are willing to work together to accomplish a common objective.

Your income is dependent on you at a typical job, but in network marketing, you build assets that can generate income on their own!

Network marketing, on the other hand, gives you more time and money than working a regular job does. Network marketing is for people who no longer want to balance their personal and professional lives.

Let me assist you in reducing the amount of time you spend learning about the differences between network marketing and traditional businesses.

  • First, when you work, your only source of income is you, which is terrifying. What if you fall ill? Whereas in network marketing, you can build assets that make money whether you work or not, so you can make money whether you work or not. That is unquestionably a significant distinction: whereas network marketing enables you to leverage your time and efforts rather than being solely dependent on what you do, your job is solely dependent on you.
  • Number two, at your specific employment, you trade time for cash. They cannot deal with opportunity. Then some individuals have a ton of time and opportunity, however, they have no cash. Cash with no time does us no decent. Time with no cash does us no decent. In the book Rich Dad, Poor Dad, Robert Kiyosaki, one of the most outstanding selling business writers ever, says, "A great many people train your children to go to class, get passing marks, find a decent line of work, and work for cash. Where well-off individuals show their youngsters a little something else. They foster resources that lose cash, and have cash work for them." The vast majority search for work and affluent individuals fabricate networks.
"You can continuously increase your income, and achieve financial and time freedom through network marketing. This means that time freedom is more important to me than financial freedom, but financial freedom is needed to achieve that"

Rich Dad, Poor Dad by Mr. Robert T. Kiyosaki

  • Thirdly, our occupation requires us to balance our personal and professional lives. Whereas with network marketing, you can fit your business into your daily life. People are looking for a better way because they are being laid off, downsized, rightsized, or capsized. I just listened to an interview with Richard Branson and Eric Worre. If you are familiar with Richard Branson, you know that he is the most powerful businessman in the world right now. His name is Sir Richard Branson. The following is what he said to Eric Worre during this interview: Network marketing, or network marketers in general, will create all future jobs in the next 20 to 30 years. This business has been around for more than a century. It is a $180 billion industry at a fantastic time."Work on your job full-time, but work on your fortune part-time," says Jim Rohn.

Now here we discuss the 4 quadrant theory of Cashflow:

Four Quadrant Theory of Mr. Robert T. Kiyosaki

There are 4 types of people in the whole world that are:

  1. Employee
  2. Self Employee
  3. Business Owner 
  4. Investors

Employee:

You work for your boss. You make money for your boss. Boss gives you 5% of the total income that you made for him and he keeps 95% of the income. You give your full time and energy to your boss. Here you have no money and also no time even for you and your family. 90% population lies in this category. They have only 5% of the wealth.

Self Employee:

Here you work for yourself. Here you have money but no time. You have no time to spend your holidays. As long as you keep working, the money will keep coming in. If you get sick or stop working, the income will stop. 5% of the population lives in this category. They have 50% of the wealth.

Business Owner:

They have people to work for them. They work smart. They hire people for work. They make Networks of people that generate income for them. They have much time and money to enjoy life. 4% of the population lives in this category. They have  95% of the wealth.

Investors:

Money work for them. They invest from their income۔ They make money from money. Only 1% of the population lives in this category. 

Some Businessman and politicians share their views about Network Marketing or MLM:








These are some of the top politicians and businessmen's perspectives on network marketing and its methods.


"Hope you guys enjoy it، If you like it, please pass it on so I can reap the rewards of my hard work"

 


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