These days I can think of many reasons why a Network Marketing Business is a preferable option to traditional business. Like the overheads for one! Having been in traditional businesses with huge rents and wage bills in the past, I personally do not want to go there again. In this post, the basic structure of Network Marketing will be discussed and the misconception surrounding it as well as the reasons why I think it is the model of distribution of the future.
In my own opinion… There are different models of Traditional businesses, which can be either the distribution or provision of goods and services to its desired customers. Looking at the meaning of business or commerce, it can described as the buying and selling of goods and services which can be B2B, B2C and C2C even C2B. which can also be exchange of services or products between a business owner and the consumer.
All businesses have the same goal or purpose providing product and services to the marketplace but
the main difference between the traditional businesses and a network marketing business is their marketing approaches.
The Distribution Channel In A Traditional Business Model
Manufacturer ==>> wholesaler ==>>Retailer==>> final Consumer
In Traditional Business, the wholesalers and retailers are referred to as the middlemen; they determine the prices at which reaches the final consumers due to overheads such as advertising, stocking the products in the warehouse, transportation, staffing etc. I should clarify what I mean by “a traditional business model”. I am not concerned with the various entities we can run a business through – by traditional I simply mean there is a CEO at the top and there are employees. This could mean the corner store or a large corporation. There may also be many levels of management in there – or maybe just one.
Network Marketing on the other hand is a model often called Multi Level Marketing and various other names. It is based on teams of people helping teams of people. It is word of mouth referral. There have been some misconceptions over time and some of these are still around today (I must confess to having bought into some of them in the past – purely because of my lack of understanding of the model).
The Distribution Channel In A Network Marketing Business Model
Manufacturer (Corporate Company) ==>> Distributors ==> (consumer)
The manufacturer of the product or service usually the corporate company basically avoid the middlemen and let the final consumers (users of the products) share the products through the word of mouth directly to their community of friends, or networks. This is why it is referred to as network marketing or direct selling. Exposing and Sharing a product or services with network of friends or community.
The money that would have being used by the manufacturer for advertisement or that the middlemen would have generated is being shared among their network Marketers depending on the level of performance or sales they generated. This levels can be many as it can be depending on the network Marketers effort which is why it is called Network Marketing…
One BIG Advantage of Network Marketing is the Low Risk Start-Up that lead to your million dollars success as well as leveraging the power of your team to succeed compared to the HIGH RISK in the traditional business world, you can also be left alone to fail.
Is Network Marketing a Pyramid Scheme?
One of the questions that still is sometimes asked is “is it a pyramid scheme?” Of course the answer to that is no; it is not as pyramids are illegal. Actually traditional business is really much more like a pyramid structure. It has a CEO at the top, usually earning the most all the way down to the most junior of employees earning the least. In Network Marketing the new rookie can earn more than someone up the ladder if he/she is prepared to work. It is a very fair system once you really understand it. I truly believe much fairer than traditional business. It can give everyone from any walk of like the opportunity to create real wealth for themselves and their family.
In traditional business, you get paid for the level of work you do. Someone lower down the organization ladder seldom earns more than someone above them. This can be reversed in Network Marketing where to truly be successful you have to be a leader, not hold a position that assumes power.
Tom Peters, the author of In Search of Excellence, describes network marketing as “the first truly revolutionary shift in marketing since the advent of ‘modern’ marketing at Procter and Gamble and Harvard Business School over fifty years ago.”
Is Robert Kiyosaki Wrong?
Hear what President Bill Clinton has to say;
Please share your views in the comment box below this post on network marketing as well as where you stand between network marketing and traditional business.
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To Your Success,
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