Industrydailyobserver | What Is Network Marketing? | Most people do not have the slightest idea what network marketing is, and they have all sorts of perceptions and prejudice about it. However, this article will seek to clarify what network marketing really is.
First and foremost, you need to understand how the chain of manufacturing, supply and demand goes. When the manufacturer makes a commodity, the transporters are used to distribute the goods. The transporters may be the manufacturer’s or may be the distributors. When these goods get to the distributor, they are stored, and wholesalers come for them so that they cam sell the goods to the retailers, who in turn sell the goods to the consumer. Apart from these, other middlemen are involved. The company that makes the commodity has to advertise for it, and that is why your programs are filled with commercial breaks. Also, companies use sales men to promote the commodity to wholesalers and retailers.
Needless to say, all these middlemen have to get their portion of the profits because none of them does free work. The company that manufactures has to pay for space, for its workers and its salesmen. It also has to maintain the industry and after all expenses are met (including the tea at 10am), the manufacturer wants to bank a huge profit to enable expansion of the industry.
The TV and radio stations have to be paid for every second the advertisement is being aired, and the distributors have to make profit out of the same commodity after they have paid for space and the risks of storage, among other over heads. The chain goes on and on, through the wholesaler and the retailer (including the vendor or hawker) until it gets to you, the consumer.
Therefore, you find that an item whose value at the manufacturer’s place is four dollars gets to you when it is thirty or forty dollars! This means that it is you who pays every middle man involved before the commodity gets to you.
However, network marketing cuts short this chain and it directly links the manufacturer to the consumer. Therefore, you get part of the money that the middlemen would have gotten and your up lines get a portion. This goes up all the way to the manufacturer. No wonder you also get a portion of what your down lines sell. Network marketing generally entails making a network in which promotion of a good or service is done and other people are also recruited into the network to make it wider.