One of the marketing and business models that entered India and even found a legal aspect was multi-level or network marketing. The network marketing sales model, which had similarities to the models of pyramid schemes, was much debated and some people entered this business with the aim of earning a lot of money, but what is network marketing? How does he earn money and what are the legal issues related to it?
What is network marketing?
Multi Level Marketing is a direct sales marketing strategy in which the marketer, in addition to the reward he receives for selling the product directly, also earns money from selling the people he hires. The people hired by the marketer are called his “subscribers” and the marketer is rewarded for the sales they have of his subscribers. These subsets can last up to several levels. The marketer can make more profit by having more affiliates.
How does network marketing work?
In this model of sales, the marketer, in addition to selling his product directly to the end customer using a sample of goods, must encourage other customers to join the company’s sales force. The basis of network marketing work is the sale of the product by satisfied customers of the product. The foundation of network marketing is based on customer satisfaction with the product and oral and verbal promotion of the product by customers. Therefore, the products sold in network marketing must be of high quality.
If a company is successful in network marketing, it can theoretically experience very high sales using customer satisfaction.
Membership and escalation
In network marketing companies, every marketer, if he is looking for high income, should add other sellers to his network as a subset.Top MLM software companies in India offers the best MLM software to boost up the sales and business. Theoretically, if every marketer adds two people as a sub-category and each of his sub-categories adds two people, he has 4 second-tier sub-categories. Now, if the same trend continues, he has 8 people in the third category and 16 people in the fourth category. If the subcategories continue to recruit members, this collection will grow exponentially and many members will be added to this collection.
Differences with pyramid schemes
The pyramid trade, which has been outlawed in most countries of the world, works in such a way that members commit to attracting new members to the company in addition to investing in the company. Nothing is bought or sold in pyramid schemes and only members are looking to attract new members. In network marketing companies, however, every marketer must first sell his product and in the next priority to attract new marketers.
The difference between network marketing and classic marketing
One of the problems that traditional marketing faces is the lack of attention people pay to advertise and new products. Out of every ten new products introduced to the market, only one becomes profitable. The general public does not pay attention to the environmental advertising around them, and most people make their purchases based on the recommendations of friends and acquaintances who are satisfied with the product. Network marketing software development India intends to sell the company’s products without the use of extensive advertising by making the most of oral marketing.
