What is network marketing?

Marketing network! It is a familiar name that each of us has heard at least once. But we may not know its meaning at all; Or we don't have a correct definition of it in our mind. In this article, we have tried to introduce you to this type of marketing, so stay with us until the end of this article.

It may have happened to you that you were invited by a friend or acquaintance to start a profitable business under the name of network marketing; And they have tried to push you towards this business in any way.

Many of us refuse to enter with the mindset that network marketing is pyramid marketing and are worried about losing our capital. But network marketing is a separate way of making money and is completely different from pyramid marketing.

In this article, we have tried to introduce you to the definition of network marketing, and talk about the types of network marketing and its mechanism. Finally, let's examine the difference between network marketing and affiliate marketing.

Network marketing definition

Network marketing, network marketing or multi-level marketing (MLM), is a business model in which independent representatives, goods or services of a company; Or the producer sells directly to consumers.

Types of earning methods in network marketing

You can earn money in this marketing method in two ways: the first method is to sell goods directly to consumers and receive direct profit from each sale. The second method is attracting sub-branches and receiving profit through the sale of sub-sets. Network marketing is also called multi-level marketing because each person adds a level to the network by recruiting a subset and expands the network.

In the case that you attract affiliates, you will receive a commission for the product that you have sold yourself, in addition, if the people that you have attracted to the network sell a product, you will also receive a commission for that.

In fact, in this marketing method, goods are distributed by a network of people. That is, instead of paying high costs to advertise their products on TV, newspapers, billboards, magazines, etc., the manufacturer rewards ordinary people and even consumers themselves to advertise and sell their products through negotiations and face-to-face talks. .

Network marketing is one of the most popular marketing methods because it does not require a lot of capital, in addition, its time depends entirely on the individual and can be considered a part-time job for people.

In network marketing, unlike pyramid marketing, you don't have to recruit affiliates.In network marketing, you can earn money only by selling goods directly to consumers. But if you have a branch, your income will definitely be better.

How network marketing works

Imagine that a company or manufacturer has a useful product to offer and prefers to use the network marketing method to market its product instead of paying high costs to advertise its product in the traditional way.

Hiring people as marketers

The company in question must first hire people as marketers (these people do not need special qualifications or qualifications and can be chosen from ordinary people). The people hired by the company must first be well trained. This training includes familiarizing them with the company's product, the product's benefits, and how to introduce, advertise, and sell it.

In fact, marketers need to know exactly what they are going to sell. Why should people buy that company's product? And what advantages does this product have over similar products? Marketers can persuade people to buy that product only if they know the answers to these questions.

Product purchase by marketers

After the marketers pass the training stage, they are asked to pay a certain amount of money to buy a certain amount of the company's products; Or the products are provided to them for free.

Product sales by marketers

Now these people should try to sell the purchased product to those they know. Of course, this work requires a detailed and practical explanation, and the correct introduction of the product to consumers.

Network marketing is more of a form of art than a business! As a marketer, you must have the art of attracting customers. You must be able to properly understand data, analyze customer behavior, and focus on the art of selling. Network marketing can boost your confidence, motivate you, and help you reach your true potential.

All these works are done so that the marketer can deliver the product directly to the consumer.

On the other hand, in addition to selling, the marketer can also try to attract other people as marketers to the network, and train them so that they can act as marketers in the network. This type of marketing follows a hierarchical system and a fixed process is repeated at different levels.

In the following, we will explain how this type of marketing works with a simple example and end this section:

An example of how network marketing works

Suppose you, as a marketer, have decided to advertise a company's product (for example: soap) using the network marketing method. After going through the training phase, you start with the people closest to you, such as family members or friends. Soap is a widely used product, and is used by almost everyone. So, anyone around you can be a potential customer for you, so your sales only depends on the type of expression and your ability to convince and persuade the customer to buy.

If you can convince someone to buy and sell the company's product to them, you have taken the first step to making money. Now, the same person who was a consumer until now, can act as a marketer.

If you can convince the consumer with speech, reason and logic to act as your branch in the marketing network, this person will become your sales representative in the network. This means that you will receive a commission for every sale he makes. Now, your sales representative can also attract people as a subset in addition to selling products directly to earn money in this way.

Although affiliate recruitment has a great impact on increasing marketers' income, network marketing focuses more on product sales, not just affiliate recruitment.

Types of network marketing

There are different types of network marketing. This marketing method can support only one model, or it can be a combination of several different methods. In general, the types of network marketing are:

One level marketing network

The simplest type of network marketing, this is one-level network marketing where you start selling a company's products or services by registering in the marketing system, and you receive a commission based on your sales.

In this type of network marketing, the basis of your income is only your own sales, and you do not need to attract a sales representative and create a subset. You just need to focus on selling and building your relationship with the customer.

Two-level marketing network

In two-level network marketing, the members of the marketing system, in addition to direct sales, also try to attract others to the network. In this model, in addition to selling products or services directly, you must also attract a sales representative for yourself, so that you can get a commission through his sales. In this way, you are considered as one level of the network and your representative is considered as the second level.

Multi-level marketing network

This type of network marketing is similar to two-level network marketing, with the difference that there is no limit to the number of sales representatives you can attract and you can earn sales commissions from your subsets at several levels.

Some companies set a certain level for network member commissions. For example: until the fifth level reaches the top of the commission network and after that no more commissions will be awarded to him. Some other companies also have no limit, that is, even if you have 1000 followers, you will receive a commission from the sales of all of them.

Binary or binary marketing network

There is another type of network marketing that follows the binary system. A binary system in network marketing is a type of multi-level network marketing, where you only have two branches and then you have to balance them.

That is, if a member is added to the first branch, one person must also be added to the second branch. In addition to this, the purchase amount of these two branches must be in balance, so that the commission is awarded to the head of the branch. It is difficult to keep the level of branches in balance, that's why binary network marketing is one of the most difficult types of network marketing.

Advantages of network marketing

Network marketing can have many advantages for both companies and marketers, and we will discuss the most important ones below.

It does not require any cost for advertising

Advertising through traditional methods, especially for companies and start-up businesses, is not economical. Therefore, they should choose a method for marketing that has the lowest cost. Since network marketing is a method based on personal introduction and word-of-mouth advertising, there is almost no advertising cost involved.

Marketers are not paid a fixed salary

In network marketing, each person receives a commission according to the amount of their activity and the amount of product sales, so the company does not pay any fixed salary to the marketers. In this system for marketers; More sales equals more revenue.

Marketers don't need a lot of capital to get started

Any business you want to start, you must consider capital for it, the amount of this capital depends on the type of your business. Network marketing is one of those businesses that requires little capital and almost everyone can use it to earn money.

It is flexible in terms of time

It can be said: flexibility in terms of time is the most important feature of network marketing. You can have your steady job and spend your free time on network marketing and product sales. In other words; You don't have to quit your job and risk your financial security to start a new one.

The difference between network marketing and affiliate marketing

Network marketing is actually a type of affiliate marketing or sales cooperation . These two marketing methods are based on commission, but they have fundamental differences with each other in the type of advertisement, referring to customers and sales method.

Affiliate marketing is a digital marketing method in which you promote a product by spreading your affiliate link on the internet, social networks and other advertising platforms, and if the product is sold through your link, you will receive a commission. You get it. In affiliate marketing, there is no need to buy a product and then sell it, and only getting an affiliate link is enough to advertise and sell.

If network marketing is a personal and relationship-based business. In this marketing method, customers are usually familiar people with whom you have a direct relationship and you sell the product to them directly.

In affiliate marketing, the commission is usually one level, and you only get commission from the link you sell. If you can receive commission from one to several levels in network marketing.

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