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Chapter 21 / Section 1 – What Is Network Marketing?
Network marketing is one of the most controversial sales methods that are used online, and while for many companies it can prove to be a very successful sales method, it has also been accused of being quite negative. There are many large companies that use network marketing successfully, and these include global names such as Amway, Avon Products, and Herbalife. The key to this is that the business model must work for the company, the seller, and the consumer for it to be successful, otherwise, it can be a mistake to try and use network marketing.
The Basics Of Network Marketing
At its heart, this is a method of selling that uses an organic way of developing an independent sales force that will each look to sell products to consumers, while also trying to encourage friends and acquaintances to join the sales force. The incentive for sellers to recruit others to sell the products is that not only do they gain commission on their own sales, but they also receive some commission from the sales made by people they have recruited to the sales force. In order to really work, network marketing is best used with physical goods that are relatively small that can then be shipped to the individual sellers to deliver to their customers.
Developing A Network Marketing SalesForce
There are many different ways that can be used to recruit sellers to promote your products to their customers, but the most important features are that the commission must be attractive for the sellers, while the products must also be attractive and useful for customers. In terms of making contact with potential sellers, there are many different ways that this can be achieved, but social networking is one of the best ways to achieve this, with a variety of groups on offer online. Word of mouth is also a very good way to find sellers, and recruiting your friends and getting them to recruit their friends is also very effective, although it can be a little slower to develop.
The Benefits For Companies And Sellers
The benefits for companies using network marketing are very attractive, as they will have a sales force that is very motivated and want to achieve sales so that they can then earn the commission that they will receive. The type of sales that they will look to achieve can also be very successful, as those selling to friends and family will often have a great enthusiasm for a product and can achieve repeat sales too. Sellers also enjoy great benefits from network marketing, as it is a career that they can use to achieve sales around commitments as parents or carers, while also making reasonable returns if they are successful.
The Drawbacks Of Using Network Marketing
There are several problems that people using network marketing have experienced, and one of the most difficult is that the industry does have a reputation for being unscrupulous, and in some cases outright fraudulent. However, there are also plenty of companies that do this very successfully. For companies considering using network marketing to sell their products, it is vital that they create a system that ultimately rewards sellers, while still bringing genuine sales through to the company that will allow them to make a profit.