In the most general sense, network marketing is a home based business opportunity that involves the marketing and sale of products and services. It is called "network" marketing because business owners can earn income not only through their own direct sales of product or services, but through the direct sales of a network of other business owners with whom they hold a special relationship.
Usually, the network marketing business owner is an independent affiliate with a parent company. This forms a relationship that is profitable for both parties.
For example, the company handles all of the complexities associated with maintaining a big business such as research, planning, development, production, storage, shipping, handling, etc. The independent network marketer is then contracted to help generate sales for the company from which he will be given a percentage of the profits from the sales that he generates. He may earn up to 100% profit from his direct sales. He may earn residual profits from customer reorders. He may earn residual profits from the sales created by people who he helped start their own business as an independent affiliate with the company. For the network marketer, the potential profit from this combination of direct and residual sales is very great, without having to deal with many of the hassles of owning and maintaining a business. The company profits from having thousands of affiliates, who are not employees, who are generating sales.
When a network marketing business owner helps another person start a business affiliation with the parent company, he becomes a sponsor. The person that he sponsored becomes part of his "downline." The sponsor becomes part of this person's "upline." This is an example of the special relationship mentioned above. The company rewards the sponsor by allowing him to share in the profits from the sales generated by all of the people that he has sponsored as well as all of the sales generated by the people who were sponsored by them.
Depending on the company's profit sharing plan, this process could continue down several levels, until the original sponsor has his own organization, or network of individuals under him, whose sales he is deriving profit from. This is also known as multi-level-marketing.
Network marketing is a powerful business concept, and potentially much easier for the average person to profit in. Just don't kid yourself, or let anyone else kid you. if you understand the fact that network marketing is a serious marketing and sales business, then you are in a better position to evaluate what you want to do, and you've overcome a big barrier to your success.
Article Source: http://www.BharatBhasha.com
Article Url: http://www.bharatbhasha.com/marketing.php/71794
Article Added on Friday, March 14, 2008
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| About Author Tom Branch : |
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Tom Branch has been a network marketer for over 5 years. Click here for a free booklet revealing why network marketing sounds so good in theory...yet never seems to play out that way in practice, leaving many networkers out of luck, out of money and out in the cold.
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