It’s surprising, but I still have quite a few people ask me “What is a Network Marketing System.”
A Network Marketing System is, in its very essence, a business model. It’s simply a method of operation that supplies products or services from the manufacturer to the final customer. But it’s the step in between points A and B that make the Network Marketing System one of the most amazing business models in the world.
Here’s why:
Network Marketing Systems Put Money In Your Pocket
Yup. They do. Unlike traditional business models, a network marketing system offers several ways to capitalize on commerce. Most compensation plans pay you when you sell the company’s product or service, and also when members of your downline sell them, too.
Let’s say you’ve got a downline of 5 people: You earn a commission of those people’s sales in addition to your own sales. Pretty cool, huh? Now imagine if you had a downline of 100 or even 1,000 people! You’d be making money while you slept.
How can MLM companies afford to do this:
Network Marketing System: No Middle Men
The traditional business model goes something like this:
- Company A builds a product
- Company A hires Company B to ship the product to a whole sell warehouse
- Company C stores the product in its warehouse
- Company C sells the product to Company D
- Company E ships the product to Company D
- Company D sells the product to the consumers
Each step in this model costs money, which means you’re looking at five price increases before the product ever ends up in a customer’s hands. And this illustration is probably very conservative, as I’d guestimate that more than 10 companies are involved in most products these days.
Network Marketing, on the other hand, skips all of those middle steps and concentrates on the producer (the network marketing company) and the final consumer. Then it puts you in the position of all of those in between stops. That means all the money that normally gets wrapped up in warehousing, logistics and shipping ends up in your pocket instead!
That’s the big picture. There are many intricate details, which are discussed in other pages on this site, so feel free to look around or ask questions.