How-does-multi-level-marketing-business-model-work

Some people believe that salesmanship and leadership are inborn traits. Some consider salesmanship to be an art form. Then there are others who believe that with the right experience, everyone can become a salesperson. Every marketing and sales student is taught the traditional principles of channel sales and maintain sales.

Selling has come a long way, from the modest days of mom and pop shops to mega stores. Aside from these distribution platforms, we have seen the development of the concepts of direct selling and referral selling over the last forty to fifty years.

In the last thirty years or so, another modern advertising pattern known as Multi-Level Marketing has spread around the globe stealthily but quietly, engaging millions of people in selling goods and making a decent living for themselves.

It’s not uncommon for friends to invite you home for a tea party over the weekend, and you end up purchasing the tempting Tupperware items for your home. Similarly, thousands of people purchase Home appliances, Personal Care Products, Food supplements, and other lifestyle products from their friends who are members of the ABC Network. If you’ve been exposed to these types of transactions, you’ve probably heard of Multi-Level Marketing or Network Marketing.

Network marketing is a relatively recent phenomenon that has spread around the world since the early 1980s. Today, it includes housewives, business executives, elderly people, teachers, and people from all walks of life who are selling through a network and earning early respectable incomes while continuing to follow their vocations.

Since network marketing is a recent concept that has gained traction in the last three decades, there isn’t as much science, analysis, and literature available as there is in other conventional marketing theories and practices. Network selling is described by the WFDSA – World Federation of Direct Selling Agents – as “marketing and selling of products and services directly to consumers in a face-to-face and in places such as home, workplace, and other offices other than retail sales locations.” On the surface, this description accurately defines Network Marketing. However, as you can see, this term also applies to Direct Sales, which is not the same as Multi-Level or Network Selling. There are some distinct distinctions between the modalities that these two sales approaches use, but there are also several parallels.

In both Direct Selling and Network Marketing, the salesperson has face-to-face contact with the buyer or client. As a result, both approaches included an End User or End Client on one end and a Salesperson on the other. In all scenarios, the Salesperson is attempting to persuade the decision-maker. The key distinction between the two approaches lies in the hierarchical structure of the sales departments, as well as the system of reward and revenue production. Network marketing, on the other hand, is considered a subset of direct selling approaches.

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