What is network marketing? In simple words, Network Marketing is a business model, by which a company makes its products or services reach, customers without using a traditional business model. In network marketing business is done with word to word mouth advertisement. To understand more in detail, you need to understand, what is Traditional Business model. Let me explain.
Whenever you need to buy some product eg, a cell phone or a soft drink or anything, where do you buy it from?
Do you go directly to the manufacturer of that product? Let us say, you need to buy Coca-Cola or iPhone, Do you go to buy it from the manufacturer of that product? No
Where do you buy it from?
Retailer! Isn't it?
Now, the retailer does not manufacture that product. It buys from the wholesaler in that area. Wholesalers buy it from a Regional distributor a regional distributor buys it from a national distributor and a national distributor buys it from the manufacturer of the product. So there is a chain...
The product ranges from Manufacturer to National Distributor to Regional Distributor to Wholesaler to Retailer to Customer and a huge budget of Advertisements is also done to make the product popular.
-All these middlemen earn in this process. Almost 70-80% margin in the selling price is kept by these middlemen and a huge budget is spent on the advertisement. That increases the cost of the product to the customer.
But in Network marketing, there is no need for advertisement, there is no middleman. The product reaches to customer directly from the manufacturer. There is no middleman. Who makes it reach customers, only the distributors of the company who are customers of the company, known as IBOs ie, Independent Business Owners.
To understand it better: Let us say, you work with a network marketing company as an IBO (Independent Business Owner). You buy a product from the company for your personal use. You use that product, you like the product, and are satisfied with the product. Now, you recommend that product to one of your friends. Your friend buys that product, as you recommended. Now the company says, your friend has bought the product from us, just because you recommended the product to your friend. So you get the commission on that.
That is the beauty of network marketing. You recommend the product to your friend, he buys and you also get the commission on that. That is also known as direct selling. But network marketing also gives you another benefit.
Now let's say, your friend also liked the product and recommended that product to his/her friend. And his/her friend also buys the product. Now, who will get the commission?
This is great, as now, the company says, your friend obviously gets the commission on the product sold, but because your friend is part of your network, you also get some percent as commission on that sale. That's the real beauty of network marketing.
So, there is a network under you and you get on total sales turnover generated by the network under you.
Everyone is in a win-win situation here.
Whoever is buying products or services only, getting the best quality products. Whoever is selling a product is getting a commission on sales and a commission on total turnover generated by his/her network people.
Here the company also benefits as its sales are being done without spending a huge budget on advertisement. Sale is done on recommendation also known as referral marketing, by its customers only.
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Network Marketing Companies In India
In India, there are numerous network marketing businesses in existence. Note that the companies' standing may have altered, therefore it's important to verify their present status and reputation. Below is a list of renowned network marketing companies in India:
- Forever Living Products India
- Amway India Enterprises Pvt. Ltd.
- Vestige Marketing Pvt. Ltd.
- Herbalife International India Pvt. Ltd.
- Modicare Limited
- Oriflame India Pvt. Ltd.
- Avon Beauty Products India Pvt. Ltd.
- DXN India Pvt. Ltd.
- Tupperware India Pvt. Ltd.
- Nu Skin Enterprises India Pvt. Ltd.
Always be aware that the views of network marketing companies may vary greatly, so it is best to do thorough research on any organization before getting involved. It's a good idea to confirm what is the most recent information as new companies might have recently emerged or the status of existing ones might have changed.
To promote and market their products and services, network marketing companies in India depend on a network of independent partners. One of the leading companies in this market, Forever Living Products India ., is well-known for the wide variety of health and personal care products it offers. Vestige Marketing Pvt. Ltd. specializes in wellness and health products, while Herbalife International India Pvt. Ltd. focuses on nutritional supplements and wellness products. Another significant company is Medicare Limited, offering a broad range of products for home care, health, and personal care.
These companies frequently use a direct selling strategy, letting people start their very own businesses by selling products as well as recruiting other people into the network. Network marketing's success is often attributed to its compensation plans, which pay distributors both for their own sales as well as the sales of the distributors they bring.
Although some individuals use network marketing as a way to achieve success and financial freedom, this industry has come under criticism for its occasionally dishonest business practices and pyramid-like organizational structures. When joining, potential participants have to be sure they fully comprehend the standing and business plan of a network marketing organization. Due diligence is necessary when it comes to making wise selections in the constantly shifting field of network marketing in India, exactly as it is in any other business endeavor.
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