Network Marketing evolved simply from a distribution system or a form of marketing channelling goods and services from one manufacturer to the end consumer. It evolved due to the over shelving of stocks resulting from the improvement in production technologies, procedures and processes and elimination of increasing number of traditional middlemen1 became the need of the hour. As the market grew more customer-oriented, increasing number of middlemen was resented. At the same time the final cost to consumer is increased because of more middlemen.
The manufacturers recruited a large sales force for door to door selling on their behalf, that is, direct selling in addition to their traditional marketing. In the process of development more autonomy was given to the sales task force and they were motivated to increase the sales for the incentives to be given in the form of commissions. Further, in the process they were even asked to appoint their own workforce to help them increase their sales and expand in consideration of the overriding commission on every sales made by the sales representatives appointed by them. This propagated to a large network of sales people or distributors. And that is how the simple strategy became the business opportunity for these sales people and many more to follow in line.
This is one of the fastest growing yet most misunderstood method of moving products that is in vogue today. This entrepreneurial business is also called a wave of eighties. In nineties it not only caught the attention of millions but it made them interested in taking up this opportunity further, either as a part time or as a full time business. And now it is flourishing globally. The advancement in technology has taken it to new heights through internet based network marketing. That is how a simple marketing strategy has developed into a wonderful business opportunity for many.
You can also check How to make Network Marketing Successful? and Selection criteria for Network Marketing.