What is Network Marketing and How does It Work?

Network marketing is a business model where an independent salesperson sells products from a parent company. It requires salespeople to assist with the leaders.   

If you are to join a network marketing company, it is essential to understand how it works and how to do it properly. Read this article below to understand how network marketing works.       

What is Network Marketing?  

Network marketing is a decentralized product-selling system of a company. So instead of hiring a bunch of full-time salespeople, the company allows individual salespeople to sell the products based on commission.  

Many companies in various industries have used this system, such as the beauty and clothing industry. Besides that, insurance companies also use this system to sell all their products. Before joining any network marketing, one needs to research and ensure its profitability.  

How does Network Marketing Work? 

Network marketing requires the salespeople to build networks of business partners to assist with lead generation and closing sales. This system commonly requires the salespeople to purchase products from the company in bulk and sell them at higher prices. They can sell it to their relatives, friends, and even colleagues.  

Some companies do not require the salespeople to do the bulk purchase. Instead, when the salespeople manage to sell their product, they will pay them the commission with a particular calculation. 

That commonly applies to the insurance company. The salespeople even do not need to buy the product. However, by buying the product, they can increase the potential buyers’ trust. 

When the person who sells the product uses the product, the potential buyer tends to believe that the product is good and useful. But still, the salespeople do not need to make bulk purchases as it is a financial product, not a tangible object.  

In this system, the salespeople can set and control their schedules and working hours. The companies that operate this system commonly do not set sales targets as they have got revenue from the salespeople’s purchases. 

This system allows the salespeople to set their targets and they will be fully responsible for their goods. Therefore, the company does not need to worry about the salespeople's performance and salaries.  

They even tend to be more responsible and target-oriented than full-time employees because it is commission-based, which means they do not get paid until they manage to sell the product. 

When they manage to sell a product, they will get a profit or commission, as well as the leaders who hired them. Speaking of which, the hiring process is quite simple. The salespeople commonly just have to be hired by their acquaintances who have become leaders and pass a simple test. So, there will be no interviews with HR, users, etc.         

Tips to Join A Network Marketing  

Follow these tips below to choose and join a network marketing: 

- Find your passion and choose a company that provides a high-quality product that you like or at least you use. This will make it easier for you to promote and sell it.   

- Do your research and compare a few companies that run network marketing systems. You can use the internet to research and ask your acquaintances who have become salespeople in those companies. Find out about the payment system, the upline policies, the support they provide to the salespeople, etc.  

- Be resilient and patient; finding your first customer and building a network is difficult. Its process may take some months. When you start becoming a salesperson in network marketing, set your focus on increasing product awareness and your branding as a salesperson as well. This will let people know that you sell that product, so they will contact you when they need it.  

That is how network marketing works and some tips to do it. Remember that becoming a successful salesperson in network marketing will take some time. But do not get carried away by time.