Decoding Network Marketing in Simple Terms

Businesses around the world operate in various forms and structures. Direct Selling or Network Marketing is a popular form of business where one sells products directly to the customer. Although this model of business has been around for a long time, it has picked up pace in the last few decades. Seasoned Direct Selling Consultants In India guide entrepreneurs and direct sellers in designing a structured business plan and execute it. If you are fairly new to this kind of business, here we break it down for you in simple terms.

Direct Selling is a form of Network Marketing:

MLM businesses are mainly based on directly approaching the customers eliminating the middleman. Business owners or the sellers generate sales by promoting the products or services to their networks. They reach out to new buyers or potential business partners by referral or by word of mouth marketing. In this form of business, the promoters or the distributors adopt a marketing strategy where they not only generate sales for themselves, but also for their downline whom they have introduced to the company.

One business has multiple distributors:

Unlike other businesses where salaried employees work for a firm or a company, MLM businesses are run by unsalaried sales people. Their people are referred to as associates, consultants, independent agents, franchise owners, dealers and so on. These individuals represent the parent company and market the products to customers in their region. In turn, the company rewards them with a pre-decided commision and profit based on the volume of products sold by each agent. They also get a good amount of commision from the sales generated by their downline.  

Independent agents will build their active customer base:

A top MLM Consultancy will always encourage business owners or agents to build a strong customer base. This has to be a wide network of people who regularly buy products from the parent company and are active buyers. Apart from this, the distributors also need to grow a formidable downline of distributors who have their own customer base. This helps in expanding the business and generate substantial profit every month.

The agents have many fold profit:

The unique feature of a Network Marketing business is that it constantly generates revenue for the distributors. The parent company offers them commission based on the number of products they have sold. Once they achieve certain goals, the distributors get rewards or promotional gifts. Apart from their own income, the area managers also get some royalty from the sales generated by agents in their downline. Each company has its own compensation plan and accordingly the agents are rewarded.

The direct selling sector has a huge potential for both top global brands and smaller sized companies to market their products and services to consumers. It presents a real opportunity to all talented and independent sales agents to earn huge profits without being a broader part of the company. It’s an avenue where entrepreneurial-minded and sales minded people work independently to build a business with low costs and make an impact.