Network Marketing, The Business Model
There are many individuals who don't understand the meaning of network marketing
. They have some kind of misconception regarding network marketing which tends to stop them getting involved in it. It is necessary to know what it really is before involving yourself in its activities. Primarily, you are building network marketing to endorse services or some product. You therefore need to build up a strategy, which will help you in defining, how you can create an effective marketing network, and the activities that are associated with it.Online network marketing is most profitable these days. You can build larger networks on the Internet that will allow you to utilize it more effectively. It is necessary to study tips regarding before you build your own strategy on how to work. It will help you in retrieving the knowledge required for building effective strategy compliance with the current needs.
We're talking a billion dollar business in this modern world. It is being taught in the major universities all around the world as a Business model. It has been stated in the Wall Street Journal that around 50% to 70% of all the services and goods sold in the millennium will be from this business model, which perfectly suits the information age.
Network marketing is a lot different from the conventional model way of carrying out business activities by drug, consumer packaged goods and food companies. It has become one of the uprising income opportunities in the US today. The basic idea is that several individuals do some work rather than some individuals doing loads of work. The first Billionaire of the world J. Paul Getty said, "Rather applying my 100% effort, I would prefer 1% of effort of hundred peoples.
Rather using the traditional distribution method of transferring products from the manufacturer to the wholesaler to retailer to customer, the organizations employ a network of self-governing marketers who works as a bridge between manufacturer and consumer. They directly move products from manufacturer to consumer. Further more, the structure of cost of network marketing company is diverse compared to the conventional packaged goods marketer.
A huge amount of money is spent on advertising of their products by the conventional companies to entice the audience to purchase their product instead opting virtually identical product being offered by another company. With a Network Company, advertising expenditure is channeled into trade commissions for the distributor who endorse product through advertising of "word to mouth" i.e. conveying information about the product to other peoples. The funds are spent earlier than the sale is generated in conventional business model in form of advertising whereas in the network marketing model, funds are paid after the sale is done in form of commissions.
You have 2 sources of income with this kind of marketing:
1) Direct Commissions and/or
2) Residual Income
The sale you create yourself is Direct Commission and the sale generated by people you have introduced to business is called Residual Income. You have to devote time and money once and will get paid several times for your effort. Residual Income helps you in receiving money from other people's effort. In the traditional sales, you need to consume time and give a lot of effort in generating sale from the customer. Network marketing saves the consumption of time as well as your effort.
This kind of business enables a person to build a down line of several people whom you don't know nor ever contacted them. This will multiply your efforts as well as increase your earning potential. That is the power of network marketing, which will give you access to millions of potential customers all around the world.
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