What is multi level marketing? It’s not a recent phenomenon; it has been around for many years. In spite of this, there are still people who ask the question. The case of these is even better than those who think they know so much about the business model but have no reliable idea in reality.
This piece is aimed at shedding light on the question. Without wasting too much time, let's get started.
Network marketing is a business model or arrangement that involves the use of independent persons or businesses in getting goods across to final consumers. To address the question of what is network marketing business question in a simpler manner, we can describe it as a business model that utilises a network of distributors to make sales.
Under this arrangement, a person purchases a sample product kit from the company involved. The individual then goes ahead to sell the products bought to his or her contacts, who may also be recruited to become fellow distributors and down lines. Any sales made by these recruits earn income for the original distributor who recruited them. Ideally, income made for recruiting people should not exceed that earned from making sales, as this could point to a scam.
Types of Multi Level Marketing Programs
1. Single-Tier Programs - These are regular affiliate programs that pay you for direct sales that you make. Some of these programs also pay you simply for generating leads or traffic for a company. Single-tier network marketing programs do not require you to bring in more sales representatives or down lines.
2. Two-Tier Programs - This type of network marketing programs not only pays you for making direct sales, but you also get to earn from the people you recruit. Two-tier network marketing programs pay you commissions for sales made or traffic generated by your down lines.
3. Multi-Level Programs - This is a type of multi level marketing programs with more than two tiers of earning. Multi-level programs give you the opportunity not only to make money from sales made by your direct recruits, but also by several other people under them.
Why Multi Level Marketing?
When people ask what is multi level marketing business, it is not always because they have no idea at all. Some of them wonder why companies need network marketers when they could have used advertisement as well as their sales and marketing teams to drive sales.
The answer is simple: they recognize the efficacy of words of mouth. When a close relative or an associate and a company gives recommendation on the perfect product to buy, which would you follow?
Chances are that you will go with recommendations made by a relative or associate. Companies are aware of this and that is why they employ multilevelmarketing to drive sales.
A network marketer makes commissions off sales or leads generated. Such a person also has the opportunity to leverage on efforts put in by those they recruit. You get to receive commissions from sales or leads generated by your down lines.
And since the amount of income to be made by a sponsoring distributor is determined by how well distributors under them perform, they are spurred into providing training and mentoring for these down lines.
With the explanation given, you probably now have answer to the question of what is multi level marketing business. This distributorship arrangement comes with diverse benefits including residual, passive income and freedom.
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