All You Need To Know About Network Marketing Companies
Network marketing, also known as multi-level marketing (MLM), is a business model that relies on person-to-person sales and recruiting. In this method, independent agents distributing an MLM company’s goods and services are often encouraged to build and manage their own sales force (downline) by recruiting and training other independent agents. This marketing strategy not only compensates the sales force for the sales they personally generate, but also for the sales of the other sales people that they recruit. Typically, MLM model involves using three basic types of systematic strategies to make money:
- Lead Generation: To locate new prospects;
- Recruiting: Adding clients and business partners to your network; and
- Building and Management: Methods used to train, motivate, and manage recruits.
Training For Network Marketing Representatives
Most individuals who join multi-level marketing enterprises are not trained to build their business unless they have some telemarketing experience. However, multi-level marketing companies usually run training sessions via conference calls, where new members can listen to experienced net-workers call prospects, overcome objections & successfully recruit new members into their business. In addition, these companies usually provide self-replicating websites to members, where training tools are available in the back-office of each member’s website.
Set Up For Network Marketing Companies
Basically, an MLM company will authorize independent non-salaried agents to distribute its products and services on its behalf. Subsequently, these agents will be awarded their own immediate profit from customers plus commission from the company through a multi-level compensation plan that is based upon the volume of products sold through their own sales effort and that of their recruits.
Independent distributors often develop their respective organizations by either building an active consumer network, who buy direct from the company, or by recruiting a sales force of independent distributors who also build a consumer network base, thus expanding the overall organization. Furthermore, distributors can also earn a profit by retailing products they purchased from the company at wholesale prices.
An entrepreneur who is considering multi-level marketing should consider these factors:
- The length of time the company has been in business.
- The up-front investment to start the business. Most reputable companies will not require a large start-up fee.
- The Company’s product-return policy. Legitimate companies will allow for the return of products.
- The amount of training and development available to Independent business owners.
Benefits Of Network Marketing Companies
Income potential: The power behind the income potential in this marketing strategy lies in the compensation plan. Most compensation plans will offer three different ways that an independent distributor will get paid. They are:
- Earned income- distributors get paid for making their own sales
- Passive income- A participant is paid upon someone in his or her organization making a sale.
- Residual income- A distributing agent gets paid for continuing sales from clients made by him and his organization in the past.
Also, this marketing strategy lets you own a business without worrying about all other aspects of running a business. Essentially, every other business will require that the owner be responsible for business aspects such as finance, human resource, operations, product developments, sales and marketing etc. Under this business model however, one is only responsible for sales and marketing business area, with the parent MLM Company catering for all of the other business areas for you. You’ll however still rake in an income that’s comparable to most businesses in which the owner caters for all the business aspects.
Conclusion For Network Marketing Companies
Networking marketing has created more millionaires than any single industry other than professional athletes. I hope this article has provided you with the useful information that you need to know to kick-off your millionaire journey.