Network Marketing: What is it? How does it work?

Today we are going to look at one of the most important topics in this online world, Network Marketing.

As we mentioned a few days ago, we have created a new category of articles on our website,

They will be a collection of guides and tutorials for those who want to hone their skills in the field of Web Marketing,

It’s a service we’re happy to provide at the request of many of our followers who follow us in our social groups (especially Facebook).

Before we start, here are some very interesting articles from a few days ago:

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Network Marketing
Network Marketing

Network Marketing: What is it?

Multilevel marketing, pyramid scheme:

these terms are becoming more and more frequently used, and we often hear about the profits that can be made from this type of activity.

But what exactly is network marketing?

Network marketing is a sales method whereby independent agents,

serve as distributors of goods and services and are encouraged to create and manage their own workforce by hiring and training other independent agents.

Under this method, each agent earns a commission based on his or her own revenue from sales,

and on the sales made by the other agents he has hired and who are under him.

This method, also called pyramid scheme or multi-level marketing, is a multi-billion dollar industry.

Nevertheless, it is a banned strategy in several countries because of its history as a vehicle for consumer fraud.

The origins

Network Marketing
Network Marketing

Network marketing has its origins in a strategy from almost two centuries ago,

but it was in 1934, with a Californian vitamin company, that its advent in the Occident began.

Carl Rehnborg first came across the concept of vitamin supplements while in an isolation camp in China.

When he was released, he realised that the supplement he had created had saved him and all other prisoners from the health damage they had suffered.

Thus, in 1934, he marketed the first supplement in history.

In 1943, his company was the first to introduce the system of network marketing.

Everyone in the company was paid according to the various levels of sales made.

The company believed that the classical way of paying salesmen was not appropriate:

Receiving a single payment for sales work, even when the company continued to profit from their work for several years.

The true power of this business

Network Marketing
Network Marketing

The real turning point in the birth of network marketing was in 1949, when two consultants became distributors of Rehnborf’s products.

Jay Van Andel and Rich DeVos realised the true power of this business model and created their own multi-level marketing company in 1959.

In 1975, the US consumer protection agency took the company to court because they believed it was involved in a pyramid scheme,

which is when you sell a system without a product.

After four years, Andel and DeVos won the case and proved that they had a legitimate business.

At the beginning of the 1980s, the English term ‘multi-level marketing’ was replaced by the current one, ‘network marketing’.

This case set a precedent for all the new companies that started to follow this business model.

How Network Marketing works

Network Marketing
Network Marketing

Network marketing, also called multilevel marketing, is a marketing strategy for selling products or services,

Under this strategy, the workforce sells the company’s products or services,

and the earnings of the participants are derived from a workforce that is not compensated through traditional wages.

According to this strategy, the workforce is in charge of selling the company’s products or services,

and the earnings of the participants are derived from a commission-based pyramid or binary compensation system.

Each network marketing company imposes its own specific compensation plan for the payment of any earnings to participants.

Nevertheless, compensation plans pay participants two potential income streams:

a commission on sales made by participants to their retail customers

A commission based on wholesale purchases made by distributors below the participant.

Network marketing and Pyramid schemes

Network Marketing
Network Marketing

In short, a pyramid scheme requires its participants to pay an entrance fee to start earning money,

whereas a legitimate network marketing scheme will offer its participants a fee related to the amount of goods or services sold.

The pyramid scheme is therefore an unsustainable business model,

because it implies an entrance fee paid by the participants,

and very often no products or services are sold.

In this way, the only people who can earn money in a pyramid scheme are those at the top, which is why this system is illegal and banned.

Since no products or services are sold, there is no way for participants who pay the entrance fee to earn money.

The central element is the promise of very high earnings in a minimum period of time,

all you have to do is pay the entrance fee and find other people to do the same.

In this way, with the promise of supposed products or services to sell,

the money paid by the participants only enriches the investors at the top of the pyramid.

Network Marketing Structure

Network Marketing

The individual (in blue) will receive compensation from the sales of all subordinate distributors (in white).

The independent participants, who do not receive a salary, are then called “distributors” or “associates”.

These are authorised to sell the products or services of the master company.

Each distributor receives an immediate profit from customers, plus a commission from the company that is based on the volume of products sold in total,

meaning both through the efforts of the individual distributor and through the efforts of all other subordinate distributors.

The distributors then develop their organisations

by creating a network of customers who buy directly from the company or by hiring other subordinate distributors,

who in turn will create a network of customers, expanding the network marketing structure and creating the multi-level compensation structure that powers this business model.

Coaching Program for Profitable Network Marketing

Network Marketing
Network Marketing Coaching Program

15 people per week into your NETwork marketing business.

I thought you might be interested in this “explosive” training course.

Steve Smith is a 20 year veteran of the NETwork marketing Industry.

He has put together without doubt the most in-depth coaching course how to build your NETwork Marketing team just using the Internet.

His coaching course “Bringing the NET into NETwork Marketing” is proving be the most sort after in the field of NETwork marketing.

Not only that, you can make BIG $$$$ from promoting the course as well.

Check out this link and see for your self.

He also offers you a 60day no quibble money back guarantee, that is how confident he is you will enjoy and benefit from his in-depth training modules.

60 modules covering EVERY aspect on building your NETwork marketing business using the POWER of the Internet.

It’s a Step by Step system that allows you to earn while you learn.

Network Marketing

5 Essential skills for Network Marketing

Network Marketing

Becoming a “Sales Expert

You have to become the number one salesperson in your company.

Being a good salesperson does not mean massacring people to make them buy a product they would not otherwise buy.

Many people make the mistake of seeing sales as a kind of forced persuasion.

A good salesman does not force anyone to buy his products.

A good salesman is one who is able to create and manage relationships!

The salesman focuses on the people in front of him, takes an interest in them and builds a relationship.

In sales it is important to build a relationship with your customers so that they feel comfortable and confident.

A large part of your network marketing business will depend on the bond of trust and reciprocal understanding that you will be able to build with your customers who will also become your downlines.

Become “your company’s recruiting expert”.

You have to be able to recruit other people like you in your company who have certain characteristics and do the same job as you do.

In this respect you need to learn what attitudes the people you bring into your business need to demonstrate,

Recruiting in a random way and forcing people to join you risks overloading you with many people who will become ballasts.

Being a charismatic leader

To be a successful networker you have to become the charismatic leader of your company,

because you have to learn how to motivate your team on a day-to-day basis and make them do more and more for them and their families.

Management is the entity that creates and sustains an organisation.

Without good management any company is in great difficulty.

Being a good educator

You also have to be a good educator,

because the whole business is based on the ability to transfer skills and to make ordinary people become special people.

There is a big difference between being a educator and being a trainer.

Being a good educator means mastering a mix of ‘knowing’, ‘knowing how to do’ and ‘knowing how to transmit’.

The educator is the person in the position of developing competences in his clients.

Being a marketing expert

The most important skill perhaps of all is to become a marketing expert,

because over time you can’t just work with your direct connections and school friends.

If you want to be really successful in networking and you don’t want to just earn 90/100 dollars a month,

but you want to earn 2000, 3000, or even 10,000 dollars a month you have to learn how to meet new people who might be interested in working with you,

you have to learn how to market and promote your business to millions of people.

Every professional should consider marketing as a real skill to be developed day by day.

It is only marketing that allows you to have continuous and constant FLOWS of new customers.

Marketing should come before any professional development.

These were the main characteristics a network marketer should have, summarized in a few words.

But there are many more and above all they are not characteristics that can be learned immediately,

it takes a lot of experience and in our opinion a guide, the coaching training we presented above is very useful,

Constancy in Network Marketing

Network Marketing

Being constant in network marketing is crucial at all levels.

If you have just started your “business” and you are not consistent in what you do,

I’m sorry to say that you’re not going anywhere.

If, on the other hand, you have already built a team, NOT being consistent will result in its loss.

To conclude.

There are a lot of nice words behind network marketing,

but the reality is that if you want to get into the top 5% of earners you have to train,

join a company with an effective and above all “proven” system, and be constant.

It doesn’t matter if this is the business of the future or not, because it’s you who has to make sure it’s the business of YOUR FUTURE.

Like everything else, network marketing may or may not be right for you.

Remember also that to be successful in network marketing today,

you need to develop knowledge and cultivate skills that were once not absolutely necessary.


Network Marketing: What is it? How does it work?

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Network Marketing: What is it? How does it work?

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