Everything You need to know about Network Marketing – What Is It?

  • Jul 22, 2024
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What is Network Marketing?

Before we move on to the nitty-gritty of network marketing, let us get introduced to what it is all about. In simple words, it is a business model that is based on several in-person and person-to-person networks to sell products or services.

Here the term "network" is most important as it carries the whole essence of this model. There is an apex person or group who hires a body of members for their business. Each member of that body is responsible for interacting with several other potential customers. These customers gradually become a part of the network and spread the message of the business among more potential customers. This forms a whole chain or network of people who contribute to the growth of the business.

Because of its multilevel interactive nature, this model is also sometimes referred to as referral marketing and direct consumer marketing. These days, Multilevel Marketing (MLM) software is used to curate and manage the different levels of the networks in the business.

How Does Network Marketing Work?

The whole point of this process is to expand a business by creating a chain of professional acquaintances who can promote and buy the services or products offered by the business. Companies that employ this model often aim to create tiers of salespeople who are also consumers. These salespeople, in turn, hire more salespeople to promote the concerned business. The internet obviously plays a huge role in expanding such a model as connectivity on the web is global.

There is also MLM software that helps to manage all the tiers of a network marketing chain. Such software is Sky MLM Software. This direct selling software is integrated with features like E-wallet, E-commerce, E-pin, Payment gateway integration, etc.; all of these play a huge role in determining how successful a network marketing venture is going to be.

People who get in early make the most profits from network marketing because of the payment structure called "commissions." When a sale is made, the one making the sale gets a commission, and so does the apex person of that tier of salespeople. So, the higher your position in the network, the more commissions you get.

Pros and Cons of Network Marketing

Each and every business model has its own advantages as well as disadvantages. A really useful model, however, is a healthy balance between the two.

The chief disadvantage that many point out while referring to network marketing is its eerie similarity to a pyramid scheme. It gains its members in a similar fashion with a pyramid scheme, and the distribution of profit might also look shady. As the people at higher levels of a tier of salespeople earn a lot more than the grassroots level of salespeople.

Although single-tier business schemes are considered reliable over multitier ones, it can say that network marketing is not a pyramid scheme. It is a legitimate business model and doesn't aim at scamming is customers and investors

However, if you join a good networking chain or just happen to be at the apex of one, then your earnings in profits are very likely to see a huge growth as the business expands among more people. It won't happen overnight, as earning the trust and recognition among potential customers who eventually become salespeople take time.

Another advantage of joining a network marketing operation is that you are practicing your boss without having the grave responsibility of actually starting a company. The work hours are flexible, and you almost always work from home. This is why many housewives join this chain because it allows them to earn money as well as cater to the needs of their homes.

Many new companies are catching on to this business model, so competition is very fierce, but good strategy and outreach, both physically and on the internet, will ensure success and return of good revenue. 

What Are the Things That One Should Remember Before Joining a Network Marketing Operation?

It is pertinent to have reasonable doubts about the authenticity and reliability of a network marketing operation before you join it. Therefore, thorough research is required to analyze the reliability of the market chain you are about to join.

The track record of the founding members of the company is one such aspect that you have to consider, along with the very important question of whether you can foresee a relatively fast pathway of seeing profits. Of course, for this you have to ask yourself if you are personally enthusiastic about the products and whether if you have seen the public demanding the products. Such market research can reveal the demand for the product and help you to estimate whether you will profit or not. Promotion of the said products also has to be done efficiently. 

If you are passionate about joining a growing business and are okay with earning a low amount until the business expands, then, by all means, join such a network chain. But if you are joining for the sake of earning money, then joining a growing business might not be the best option for you.

On average, people belonging to the lower tier of the company's network earn little to nothing for a long time before they start seeing profits. Also, you have to be confident if you will be able to pitch this product and expand the business. Consider all of this before you sign up for a network marketing operation.

How Can You Guarantee Success in Network Marketing?

Well, like mentioned before, success in this field doesn't come overnight. It takes its sweet time. The efforts that you put in play a huge role. So, what is the right process, and how should you go about it? Here's how-

      Using MLM Software

As an entrepreneur, the first thing that you need to do is invest in MLM software that will help to manage your expanding business. This model is all about how any salespeople you can get on board and MLM software can help with that. For instance, Sky MLM Software offers an all-around solution to your multilevel marketing requirements and business outreach.

      Finding the Right Company

If you are looking to join a market chain, then as mentioned before, conduct thorough market research and find a company that matches your passion. Endorsing products that you are not particularly enthusiastic about will not be beneficial in the long run. Therefore, you have to consider certain things before joining the company. Check whether they have been in business for more than five years. Statistically speaking, 80% of marketing chains fail within five years.

So, if a company has been running for more than five years with a steady cash flow, then it's good to go. Yes, a steady cash flow is also very important. Read their financial statements carefully. If a company is hiding its financial statements, then there's something shady going on.

Also check, whether the company allows professional development in terms of training, coaching, technology, and all the support you need. Companies with an established customer base are sure to earn you good revenue, so make sure you conduct research on that too.

      Hiring More Salespeople and Creating Tiers or Network Chains

As you might have already understood well, the main focus of a network marketing business model is to create a chain of networks for the purpose of business expansion. This outreach does not take place on its own; you have to exert honest effort into it. The first step is being able to get people to engage with you in a conversation about the product or service and then pitch them the idea of joining the market chain.

You already have many existent relationships in many domains. The key is to capitalize on these for business success. But remember that your aim is not to become a nuisance but a businessperson who adds value to the lives of others. Thus, choosing potential clientele is a vital task. Don't just go contacting everyone in your contacts just because you are required to build a network. Network Marketing is all about connecting a growing business to a vast amount of people. A good company will train you in this aspect, as in how to approach and build a mutually benefitting relationship with your clientele.


It is of supreme importance that you don't lose heart just because your business isn't growing after a considerable time or because you are unable to build a fruitful network. The mindset to persevere is essential in the domain of network marketing. Here competition is fierce, and you have to come up with brilliant strategies and get all the hands-on deck to see the face of success. Half of the companies that employ this model of business fail within a year because of a lack of innovation and perseverance.

You may be lacking in neither of the two, but the absence of a business-oriented mindset can affect your chances adversely. Therefore, keep working and persevere to the end. 


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