What is 'Network Marketing' ?

You must have heard the marketing word in your studies or business. Marketing is simply the method or business undertaken to promote and sell services or products. Marketing involves advertising and market research too. Now the question arises what is network marketing? 

According to network marketing definition, it is the marketing strategy of an individual in which they utilize their private networks to sell the services or grow a business. Network MarketingThis type of marketing model relies on one-on-one sales by individual representatives. This individual may work from home and would have a great network of business partners and salespeople for the growth of the business. Such marketing can be of two categories; a single-tier program or a multi-tier program. In a single-tier program, you have to sell the products or services, whereas, in a multi-tier program, you have to sell the products and recruit other salespeople.

Some of these network marketing are condemned as pyramid schemes. A pyramid scheme is an unfeasible business where real investors tend to make money by recruiting other members instead of selling their services and products. Almost the entire pyramid scheme-based business collapsed. Therefore, it is necessary to research thoroughly before joining any company.

Working in Network Marketing companies often create tiers of salespeople and encourage the recruitment of their salespeople. The people making a new tier get a commission on their sales. Similarly, this new tier again recruits their salespeople, and both top and middle-tier get commissions on their sales. Thus, network marketing is based on recruiting salespeople and encouraging them to recruit their salespeople to earn profit from it. Types of Network MarketingBased on the method of marketing, network marketing can be classified into the following three categories: Direct Marketing: Direct Marketing is a type of single-tier marketing system. In this system, individuals will enroll themselves to sell their services and products to the customers.

Therefore, there is no need to recruit any distributors in direct marketing. The individual gains profit from the direct sales made by them.