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Network Marketing: What is it?
With the economy being what it is, many people are finding themselves looking at other ways to make money. Many are turning to network marketing either as a way to supplement their current income or replace it. Maybe they have been laid-off or their hours have been cut back due to the financial struggles of the company they work for. Maybe they have to work long hours or more than one job just to provide for their family. Network marketing can provide a solution to their financial struggles. It can offer freedom – financial freedom; freedom to leave the job where they are underpaid, underappreciated, and unsatisfied; freedom to spend time with their family or doing what they love most. But what exactly is network marketing?
Network marketing, more commonly referred to as Multi-level marketing (MLM), is a type of marketing structure. It is designed to create a marketing and sales force by compensating people who promote the company products not only for sales they personally generate, but also for the sales of other people that they introduce to the company. By introducing people to the company, they create a downline of distributors and a hierarchy of multiple levels of compensation, thus the name multi-level marketing. The products and company are marketed directly to consumers and potential business partners through relationship referrals and word of mouth marketing. All of us promote businesses through relationship referrals and word of mouth marketing every day. The only difference is that we don’t get paid for doing so. For example when a person goes to a restaurant and they have a good meal, they tell their friends about it; their friends then go to the restaurant. This is relationship referrals and word of mouth marketing. By promoting the business and products in this manner, the company does not have to pay for advertising such as TV, radio, or newspaper ads, which can be quite expensive. Instead, money that would otherwise have to go to pay for advertisement of the product can be given directly back to the people in the company.
The majority of multi-level marketing companies are made of independent, unsalaried salespeople, which are referred to as distributors or associates. They represent the company that produces the products or provides the services they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of those they recruit. Independent distributors develop their business by either building an active customer base, who buy direct from the company, or by recruiting other independent distributors who also build a customer base. Distributors also earn a profit by retailing products that they purchased from a company at wholesale price. Wholesale price is the price at which an individual or company buys a product from a manufacturer. Retail price is the price at which the individual or company then sells the product to customers. The difference between the wholesale price and retail price is equal to the amount of profit that is made.
Network marketing is all about leverage. A person can leverage their time and increase the number of hours of work effort on which they can be paid by sponsoring other people and earning a small income on their efforts. The basis behind the idea of leverage is that a person makes 1 percent on the efforts of 100 people rather than 100 percent of their own efforts. Most network marketers work a few dedicated hours each work. They sponsor other people and teach those people how to sell the company product and sponsor others. This process is duplicated by those they sponsor. A person leverages their time by helping others be successful and earn an income from their efforts. As this process continues, compounded growth is created and can lead to hundreds or even thousands of people coming into the business.
Network marketing is a legitimate business. It is based on providing people with real, legitimate products they need and want at a fair price, but it is not a get-rich-quick scheme. For many, network marketing can be the solution to financial struggles. It can allow a person to obtain their dreams and goals, which previously seemed unattainable; however, the financial benefit is dependent upon a person’s dedicated efforts to build their business.http://www.charlesprimas.com/
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