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What is Network Marketing

What is Network Marketing (MLM) What is Network Marketing

The history of  network marketing or also known as multi-level marketing (MLM) and originates back to the 1940s where a company trading under the name of California Vitamins discovered they could make more sales when they had a lot of sales representatives selling a small amount of product each, compared to the traditional business model, of trying to have a few sales representatives selling a lot. California Vitamins also discovered that most of their growing customer base was made up of the friends and family of their existing sales representatives who had essentially referred them to the company as they were impressed with their product line. Network Marketing is a proven system for anyone who wishes to achieve financial success. It is not surprising that network marketing is now one of the fastest growing industries of all time.

Currently it is estimated that there are more than 50 million people worldwide involved in network marketing with 150,000 new distributors joining every week. Network marketing worldwide has a turnover in excess of $100 billion annually. It is also estimated that over 100,000 entrepreneurs in the US today have made over $1 million from network marketing and Paul Zane Pilzer predicts that over the next 10 years over 10 million new millionaires in the US alone will be created from the Network marketing industry. Many business leaders including Warren Buffet, Donald Trump and Robert Kiyosaki are now currently endorsing the industry.

The network marketing industry is recognised as one of the fastest growing industries in the world today and is predicted to have significant growth well into the future as more and more companies are choosing to capitalise on this networking trend and choose to sell their products direct to the consumer. Network marketing as an industry has truly come of age. The network marketing business model and the emerging business trends the timing could not be better to capitalise on this trend and I encourage all entrepreneurs looking for a home-based business opportunity to seriously consider a network marketing business.

What is Network Marketing and how does it work?

Network marketing is simply a different way of moving products and services from the traditional methods. In traditional marketing you normally have the manufacturer who sells to the importer who sells to the wholesaler who then sells onto the retailer and then finally the consumer. At each stage of the process there is transport, advertising and profit markup before the customer who is the end user receives the product.

What is Network Marketing

 

In network marketing the manufacturer sells the product to the end-user through a network of independent distributors cutting out the middlemen as in (the importer, sales reps, the wholesaler, retailer and other advertising and transport costs). The profits from the savings made are then divided between the manufacturer and the independent distributors with the end customer getting a high quality product at a reduced price due to the fact that a lot of the added expense has been eliminated. This method of marketing increases the profits of manufacturers and distributors alike, which in turn offers the customer a high quality unique product and provides increased profits to the manufacturer and a business opportunity for independent distributors.

Network Marketing Typical Example

MLM

Network marketing is one of the fastest growing business trends in the world today. The advantage of network marketing to manufacturers is they have a team of dedicated distributors promoting their products on an exclusive basis unlike if they use a wholesaler their product is only one of thousands. The advantage of network marketing to an independent distributor is that they make a profit on every product they order or their team orders. It is a Win Win situation for both the manufacturer and the independent distributor. This partnership has seen companies grow from a few hundred thousand dollars a year to $1 billion companies in a very short space of time. It is also seen independent distributors due to the partnership with these companies earn in excess of $500,000 plus per year.

The main advantage to manufacturers is that they have a dedicated team of independent distributors promoting their products solely and the main advantage to independent Distributors is that they get a share of the profits on products that they and anybody in their team moves. This business concept has been around since the 1970s but only over the last 10 years has it really started to take off and gain massive momentum. Network marketing is the businesses of the future

were ordinary people without capital and with no stock to buy up front can generate incomes in excess of $500,000 per year.

Many people look at network marketing and dismiss it out of hand because it does not fall into the conventional way of doing business. Over the past years we have seen so many conventional businesses go broke and this is mainly due to the fact that they do not embrace change or understand how to do business in the modern age. Network marketing allows individuals to build a business, lifestyle and income from working directly with a manufacturer or MLM company that has a unique and marketable product.

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