In the literal sense network marketing is marketing of goods and services through a network of distributors. However, in marketing terminology it is defined as one kind of distribution via direct channel from manufacturers to distributors and from distributors to consumers.
It refers to a process where product, services, information and business opportunities are sold to family, friends, co-workers, and others through individuals or a chain of individuals. It helps people to prosper by providing them adequate product, services, and information through team-motivated efforts for self-empowerment. It mainly focus on individual customers need for product and services thereby utilising a business opportunity. This is a business opportunity for many because it provides an independent source of income or self employment and it has huge potential income, that is, commission with its over-rider. Anyone can start this network marketing business with little capital and with the required knowledge about the market one can achieve higher levels of profits.
It is a profession since the professional skills or specific training is required to be successful. The majority of network marketers fail to generate the extra income in the absence of proper training, commitment to personal development and special skills (like people management, negotiations, sales, leadership, money management, and many more) to make sales and build a huge contact database. The main goal of network marketing is to create a network of distributors and to focus on the sale of particular product and services to earn profits by helping others to build their empire and encouraging the involvement of purchasing party.
Value addition: Did You Know? Very often, people think network Marketing companies are very similar to Ponzi Schemes. These kinds of schemes are basically illegal set-ups members earn commission by recruiting other members wherein actually no product or service existed. The main reason behind this kind of confusion is ponzi schemes were introduced by unsuccessful people to make money by following their own rules. Although Ponzi schemes were a little more common in the past but now a day these schemes usually do not exist for a long.