Home » What is Network Marketing » Reasons for Growth of Network Marketing

Reasons for Growth of Network Marketing

Network Marketing is a powerful business concept and is growing at a very fast pace. Millions of people around the world are joining the group of network marketers. As per Direct Marketing Association, more than 13 million people in the US are working in the network marketing industry. More than 100 billion dollars worth of products and services have been moved (distributed from manufacturer or provider to the consumer) through Network Marketing by the end of nineties and the figure is growing rapidly. The attributes like freedom of work, freedom of mobility, residual income, more money, self employment, home-based nature of this opportunity lead to the fast growth of this industry. The most important among them is the income it can provide to the network marketer.

More freedom
It provides freedom of work to people. People enjoy the freedom of mobility, more choices and more control over their lives. They are not stuck to routine office jobs and schedule of 9:00-5:00.

More money
It provides an opportunity to make money in addition to the regular earning from the regular job if one has taken network marketing as a part time activity and even more money if one is engaged full time in this small business. For every sponsor that a network marketer brings, he is paid commission by the company on all subsequent recommendations made by him and his further sponsors. Network marketing provides an opportunity to earn over and above regular income for life time. It does not require any qualification, therefore, one can carry this work even with full time job.

Changing perceptions
In the industrial age of today, one no longer wish to depend only on pension plans or earn more returns from what we have by depositing in banks to earn interest, or invest in the stock market.

Simple but promising business opportunity
Network marketing is a simple business opportunity that takes to fulfilling the dream of being ‘on our own’ with low initial investment, minimal overhead, and low cost of acquiring clients.

Elimination of middlemen
The long chain of middlemen stands eliminated and the distribution costs are reduced.

Features of Network Marketing

  • It is just one way of direct marketing and is also called Multi Level Marketing. The modes of direct selling are- i) Direct Mail, ii) Door to Door selling, iii) Tele Marketing, iv) Own Retail Outlets, v) Internet marketing, vi) Network Marketing.
  • It is based on relationships. It is the process of marketing business opportunities through personal or individual relationships carrying it further to down line and up line distributors. Network marketer has full freedom of building his own independent down line.
  • This channel is the result of overcrowding of products in the shelves of the retailers. The conventional retail route is completely by-passed. The product reaches the customer from manufacturers via the network of distributors of different levels. And distributors belong to the target group of customers. In network marketing, people sell the products they use.
  • In this business investment required is small but rewards are lucrative. No formal marketing infrastructure is required. Network marketing generally have small offices and signs. Therefore, what is required to be successful in network marketing is to have the education/knowledge based on market tested results.
  • Instead of the paying for the middlemen the network marketer gets the payment for whatever amount of product he causes to be ‘moved’. Generally, the commission structure is not similar with commission system of the direct sales companies.

You can also check Benefits of Network Marketing and Limitations of Network Marketing.