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Network Marketing: A Quick Overview

Network marketing is a business model relying on person-to-person sales by independent representatives. Freelance network marketing has been increasing in popularity across the globe. One of the reasons is because people can work even from home. You need to build a network of salespeople or business partners in network marketing. These people will help you with lead generation and closing sales. Network marketing attracts people who have high energy and strong sales skills. It appeals to those who can build a profitable business by making a modest investment.

How it works

There are several names people use to refer to network marketing. These include multi-level marketing, affiliate marketing, cellular marketing, and referral marketing. Others also call it consumer-direct marketing and home-based business franchising. 

Most companies that follow the network marketing model create tiers of salespeople. These salespeople need to recruit their own networks of salespeople. They refer to the creator of a new tier as upline and these creators earn commission in two ways. They earn on their own sales and also on sales made by people in their tier or their downline. A new tier brings another new tier.

Single-tier and multi-tier

There are many reputable network marketing operations. But a lot were not able to duck criticisms and denounced as pyramid schemes. Pyramiding focuses less on sales and more on recruitment. People in this scheme need to recruit salespeople instead of sell items. The recruits will pay upfront for expensive starter kits and will have to recruit more. A network marketing that focuses on selling products is a single-tier program. When you recruit salespeople that is a multi-tier program.

Profits and earnings

There is a stigma attached to network marketing business involved with multi-tier programs. They are often characterized as pyramid schemes. Salespeople in the top tier get impressive amounts of money in these schemes. They make commissions from the tiers below them. People on the lower tiers earn so much less. Most of these businesses earn by selling expensive starter kits to recruits. Single-tier network marketing operations are usually more reputable than multi-tier ones.

Things to consider

There are several things you should consider before joining a network marketing operation. Here are some of the most important ones.

·         Do you need to sell products or recruit others?

·         Do you have any enthusiasm about the products?

·         Do you know people who are enthusiastic about the products?

·         Do the products have effective promotion?

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