MULTI LEVEL MARKETING

FRIENDS YOU KNOW ABOUT NETWORK MARKETING ?

We will try to explain you about this industry

Network Marketing or Multi-level marketing is one of the 170+ types of marketing( I will tell you about 170+ types in a while)

Multi-level marketing (MLM) or Network Marketing is a marketing strategy applied by the companies in which they make a contract with the customer for compensating them if they sell their products or services. Not only this if they are recruiting other person under him, then their sell will also results in paying commission to first customer.

Thus the name Multi-level marketing or network marketing because in this there are multiple levels in which they get the commission for the sell or if their network under them made a purchase they get the commission.

Multi-level marketing or network marketing is one of the direct selling scheme in which the customer sells the products to other customers and get money in return.

In multi-level marketing or network marketing usually a person is introduced to the business by attending a meeting or a conference in which he is introduced to a plan.

The three major components of network marketing involve prospecting (finding sources of potential customers), following up with inquiries from interested parties, and selling the good or service to the prospect.

Once prospects are cultivated, the salesperson will try to use his or her relationships with the prospect to get in contact with other individuals that the prospect might know.

In other words multi-level marketing or network marketing is a direct selling method in which independent-agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents.

In this method, commission is earned on the agent’s own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits which is also known as downline.

Many multibillion dollar companies are into multi-level marketing such as Amway, Tupperware, etc

Types of compensation plan in Multi-level marketing or network marketing 

Binary tree 

Matrix plan 

Stairstep breakaway 

Unilevel 

Let’s understand it further by taking an example.

Consider you open a restaurant under the name of My Yummy Foods. It has great taste, ambience and suddenly it is becoming very famous restaurant of the town. In order to get more money you give it a franchisee. Now you choose an investor who will be trained on the food items, apparatus, ambience etc so that your name and taste will be carried forward by him.

That guy opens your franchisee in the same town and earns a lot of money. Now you earn money from your restaurant and also a 20% commission on the bills of your franchisee because you invested your training in him, you recruited him. Similar is the case with network marketing.

Multi –level marketing/Network Marketing is a game of Leveraging of time

Let’s say you sell a product priced at Rs 1000 with Rs100 as a commission for selling a particular product and it takes you 1 hour of “work” to sell.

If you work full day 8 hours and are able to earn Rs800 in a day.

Let’s also say you have spent some time “recruiting” a few people to join your team who also want the chance to earn Rs 100 per sale and you earn a nice Rs 10 check for every sale your network make.

Now you have built a team of 10 young people and they sell 8 products in a day. So total sell by them is 80 products in a day.

Your total earnings in a day is a below.

YOU = 1 day, 8 sales, Rs800

TEAM = 1 day, 80 sales @ Rs10 each = you get Rs 800

This is the power of leveraging of time.