Introduction to Network Marketing

Network marketing is a term for a marketing structure which is used by some companies in conjunction with their overall marketing strategy. It is designed to create a sales and marketing force through rewarding company promoters for the sales they help generate and the sales of other promoters that they introduce to the company. This creates a hierarchy with multiple levels of compensation for distributors, which in turn strengthens the company’s image and marketing presence.

Independent sales people are usually called distributors, and they may be associates, dealers, independent business owners, sales consultants, independent agents or franchise owners. Whatever their occupation is, they should represent the main company that provides the services or products which they sell. They are then given a commission award based on the amount of product they sell both individually and as an organization.

The distributors of network marketing develop their organizations through creating a customer base of individuals who buy directly from the company, or finding distributors who already have a customer base which they can use. In addition, a distributor can also earn profit through retail products which they bought from the company via wholesale pricing.

Network marketing is an excellent opportunity for individuals to have their own business or their first sales role. All network marketers who are serious about making their business a success should regularly read up on the latest marketing and sales techniques, as well as various strategies for business and networking development. Some countries have regularly changing laws for marketing practices and procedures, so companies should be aware of these rules to make sure they are staying within legal boundaries.

Some network marketing companies have been subjected to controversy and many are often the target of lawsuits. Price fixing products, illegal pyramid schemes, high initial staring costs and product exploitation are some of the methods which can be used if this kind of marketing is done unscrupulously. However, the majority of companies do not operate in that way, and many businesses can use this marketing method for legitimate business practices.