Network marketing is also known as multi-level marketing (MLM) or structured selling. Network marketing means selling products or services in a network. This means that customers of a product or service can recruit other customers and thus earn money. Note: Serious network marketing must be distinguished from the well-known, notorious and illegal pyramid scheme, which does not focus on sales but on the constant recruitment of new, subordinate sales partners. However, we find the comparison with an upside-down tree more appropriate: the root, i.e. the main company, is at the top and branches out downwards through many branches to individual leaves. This symbol is particularly apt because the tender shoots and leaves (the newcomers) are the lightest at the lowest level. The main company always earns its share. The marketers, who represent the branches in this metaphor, get their share depending on how far away from the „root“ they were recruited. There may therefore be several marketers between the main company and the end customer who have continued to promote the product. Each earns their share of the revenue.when is multi-level marketing illegal? If they violate No. 14 of the Annex to Section 3 (3) UWG, i.e. if they give the impression of obtaining remuneration solely or mainly by introducing further participants to the system.
Network marketing: Can you really make money with it?
What is network marketing
How network marketing works
Network marketing means that you act as a marketer in your personal network. An important part of your work consists of offering your product or service to the public. It is also about constantly generating new customers and possibly employees through active advertising and referral marketing – i.e. positive feedback from your customers (online reviews on internet portals and offline through word of mouth).- Products that are frequently sold in network marketing are mainly: cosmetics, pet food and over-the-counter food supplements.- The services are often financial and investment advice. Many insurance companies are also dispensing with their own staff and the associated costs and are increasingly turning to the recruitment of freelancers and network marketers.
Direct sales vs. network marketing
The difference between classic direct sales and innovative network marketing is that the marketer is not employed by a company and sells its products or services to customers as a sales representative or traveling salesman. Instead, they sell a company’s products or services to their own customer base as a self-employed person. The marketer does not receive a salary, but issues his own invoices to his customers. They are therefore responsible for their own activities and cannot rely on instructions, promises, payments or statements from a superior.
Your role as a network marketer
Your task as a Network Marketer is to sell the products purchased from the company at cost price or to generate contracts for the services offered by a company, and as a Network Marketer you bear the full risk for your earnings and losses. No supervisor assigns you orders or work. Instead, you have to convince each customer of your product yourself and win them over, which can be very time-consuming and associated with numerous failures, especially at the beginning when you are new to the industry. Experience shows that you will only start earning money once you have several satisfied customers and a few employees in your downline (lower level).
How can I earn money with network marketing?
The spontaneous answer is: by working with a lot of motivation, clear ideas and goals, assertiveness and perseverance, willingness to work and flexibility. Half-heartedness is out of place here. If you are not 100% committed to your project, you will fail. You are responsible for all your own actions; there is no one behind you to catch you in an emergency or iron out your mistakes.
Offer the right product
Think about whether the product you want to sell is right for you. For example, if you attach a lot of importance to a well-groomed appearance and like to put on make-up, cosmetic products are a good choice. If you are passionate about cooking, products in this sector are a good choice. As you can see, network marketing is very personal. You not only present products, but also yourself. Ideally, you should already be active in this niche in order to reach your target group. You can do this both online via social media and offline, as you will learn in the next section.
Online and offline sales
You can conduct sales talks both online in corresponding platforms and groups and directly on site. Don’t forget to present samples and specimens of your products! You will be even more convincing if you can prove the quality of the product by using it live or showing before-and-after pictures, for example.
It is also important that you get straight to the point, as many viewers or listeners will not pay attention to you for long. Potential customers want to see results and need to be able to trust you. If you are known in your niche for your successes, you have an extra advantage.
Advantages and disadvantages of network marketing
Network marketing is a modern form of sales, which naturally has a few disadvantages as well as many advantages. Before you take the plunge into network marketing, you should know the pros and cons and weigh them up carefully.
Advantages of network marketing
One advantage for you as a network marketer is obvious: you can work from anywhere and organize your own time. Do you prefer working from home and online meetings or do you prefer direct contact with your customers? Depending on the product, you have one or the other option. You can also choose your own customers, which is usually not possible for an employee in a company, and as a network marketer you are provided with a secure and proven product. You can often even use the company’s existing infrastructure to build your customer base and network. Some companies make their website and social media channels available to help newcomers get started.You can easily network with colleagues this way; you can exchange experiences and support each other.
Disadvantages of network marketing
It is difficult to get started in network marketing if you have no equity and no reserves. Most MLM companies require an initial investment. In addition, training is often required before you are released into the customer world with the company’s products. Therefore, do your research to find out what investments and costs you will incur. There are often hidden costs such as further training measures, learning materials or other mandatory products that are not visible at first glance, and you cannot be sure of your earnings. Buyers must first become regular customers and provide you with a regular income. You may have to invest money in advertising to maintain your customer base and attract new customers. Regular customers may leave if you have not tied them to contracts. Employees can also leave the downline, which means you lose earnings or commission. You must therefore be aware that you are living with a certain risk, as you do not have a regular income. We recommend that you always set aside money for a shortfall.
Can I really earn money with network marketing?
Once you have found the right product or service and a reputable company and are ready to put your heart and soul into your work, network marketing offers you a real opportunity to earn good money and boost your career. The prerequisites are self-discipline, motivation and equity, and we hope that this blog has helped you. Perhaps you are interested in other topics?