All About Network Marketing

Syed Aquib Ur Rahman

Updated on Aug 16, 2022 17:10 IST

If you have great communication and sales skills and do not prefer the 9 – 5 schedule,
network marketing may be a good source of income.

This area of marketing is a business model that was pioneered by Avon, Amway, and
Tupperware, among many others.

While there are a lot of controversies surrounding the term, it has many advantages
when done right. Also, there are a lot more legit network marketing opportunities
today in the digital marketing landscape.

Learn about –
What is network marketing?

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 How does network marketing work?

T ypes of network marketing

Pros and cons of network marketing

T ips f or successf ul network marketing

What is Network Marketing?

Network marketing involves creating a distribution chain for selling products of a

How Does Network Marketing Work?

In this marketing strategy, a company does not distribute products to stores.

When these distributors are able to sell the product, they earn a commission from
the revenue made by the main company.

Overall, there are two main strategies to generate revenue through network
marketing.

Lead Generat ion

It is nurturing the relationship with anyone who shows interest in the product. In
network marketing, the communication is done face-to-face and lead generation
can be multifaceted in approach.

Here are some things to keep in mind when you generate leads.
T here can be situations where the customer may want to turn into a distributor under
you. So you have to ensure that they have the right selling skills.

All in all, your f irst customers are likely going to be relatives and f riends, so you can
recruit them and/or train them.

Also, companies usually suggest their distributors to sell products to the top 100

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 people you know.

Have a look at sales courses !

Recruit ment

Recruitment in an organisation is a highly planned process. And since you are doing it
alone, you may want to consider some tried and tested tactics.

If you are trying too hard to convince the people you interact with – why they should
join your distribution network or even buy the product – they may perceive it
negatively.

Some things to consider

It is best if you do not put too much pressure on your new recruits. Instead, you can try
showing enthusiasm and encouraging them to do the same.

Focus on leadership qualities. You can of f er coaching lessons to your new recruits and
guide them on how to convince others.

Check out f ree recruitment courses

Types of Network Marketing

Network marketing works through a tier system. There are three tiers.

Single Tier

In a single-tier network marketing model, you do not have to recruit anyone but sell
products to your contacts yourself. It is like af f iliate marketing, where you join an
affiliate programme and earn a commission based on the sales from clicks and
views.

Benefit: In this type of network marketing, only you are paid.

Two Tier

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The two-tier network marketing model is also followed by some affiliate
programmes. Here you have to recruit someone. Brands including Grammarly and
Avon follow this model.

Benefit: You earn money from the business and from the sales your recruits make.

Mult i-Tier

In the multi-tier system, there are more than two tiers. It is also called multi-level
marketing. One popular example of this is Amway.

Benefit: Every salesperson in the chain who is responsible for selling the product
earns, and the ones who recruit them also earn.

Pros and Cons of Network Marketing

Let’s explore the advantages of network marketing first.

Advant ages

360-degree Flexibility

Network marketing is not only flexible regarding work hours, but also, gives you an
upper hand on whom you want to work with. You can also find many businesses
that follow this business model.

By promoting products you like or the businesses you truly believe can help your
prospects, it becomes easier to sell transparently and honestly.

Another thing to note is that you are not limited to recruiting personnel. You can
grow your distribution network and earn more revenue.

Lower Costs T o Begin With

As a business also, you can encourage customers to become your distributors and
you can cut the distributor prices.

At the same time, for you as an individual promoting and selling other products,

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there is no real requirement for a huge infrastructure. Even when you are unsure,
you can just start by buying the sample product and try to sell it yourself without too
many overhead costs.

Limit at ions

High Drop-Out Rates

In the network marketing business, a few remain successful in the long run.
According to the AARP Study of Multilevel Marketing, 90% of sales representatives
leave an MLM (multi-level marketing) business in one year. But this statistic is
debatable, as these representatives who leave are not well-trained in marketing or
sales.

Do check out marketing courses

T oo Many Rejections

There is a danger that network marketing can seem like a pyramid scheme where
money is made fraudulently by recruiting investors. For that, a lot of people instantly
reject when you speak to them about network marketing and opportunities. This is
also one of the main reasons why many people drop out abruptly.

One thing to note is that this marketing model has a low conversion rate, but if you
pull through, there can be a success.

Tips f or Successf ul Network Marketing

Here are some tips that you can consider before you start with it.

Follow 1-3-5-7 Formula

Many professionals in the game follow this principle. They also mentor their recruits
with it.

All in all, the formula equates to becoming skilled in selling for one year. If your
efforts are consistent, you can convert your career from part-time to full-time in

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three years. To earn a high five- to a six-figure income, at least five years in the
network marketing business is required. To make it further, you need at least seven
years.

Research t he Company and Product s

It is advised that you know the company well enough. You can check for its validity
online. Just do a Google search and see if it comes up on the first page results.

For example, if you type Amway on the search engine, its official website is the first
result.

Have a look at their social media handles and their content to figure out if their
message resonates with your business mindset.

Also, do thorough research about their products. Ask important questions such as,
‘do they really have a market demand?’, ‘are these products of good quality and
reasonably priced?’, and so on.

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You can even refer to our blog on the marketing mix to understand the most
important aspects of marketing.

Leverage Social Media

Social media marketing best practices can be a boon. But yes, you have to create a
consistent image with regular posts. Also, do consider creating posts that do not
look spammy.

Many experts suggest that you do not mention the name of the brand. Instead, you
can try focussing on building curiosity through actual customer/distributor
testimonials and how they have been successful.

While you are at it, check out the f ree social media marketing courses too!

Parting Thoughts

So, what do you think? Is network marketing going to be your next step to earn
residual income while you work from home?

The thing is, network marketing is a double-edged sword. It has as many benefits as
much as there are an equal amount of disadvantages. But how you approach
marketing, distribution, and selling a product persistently will play a vital role in your
success.

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