Network Marketing:
    Your Gateway To
      Economic Power
   
   

What is Network Marketing?


Network marketing is a business model, utilizing independent consultants to sell products or services directly to consumers, and recruit others to do the same.

Traditional Distribution vs. Network Marketing

Traditional Distribution chain

In a traditional distribution chain, a manufacturer builds products, sends them to a distributor, who stores them in a warehouse, before sending them on to a retailer who then sells them to a consumer. The manufacturer, distributor, and retailer all engage in advertising activity to raise awareness of the products and help the consumer understand their value. The distributor and retailer also hire sales people to sell the products.
Network Marketing Distribution chain

With the network marketing business model, the manufacturer relies solely upon a network of independent consultants to sell the products to end consumers, as well as recruit other independent consultants to do the same.

Why is this advantageous?
When adopting this model, the manufacturer saves significant costs; no longer do they have to find and recruit distributors, nor worry about spoilage as products sit in warehouses. In a traditional distribution model, costs also increase as both the distributor and the retailer need to make a profit, driving either the retail price to the consumer up or the wholesale price from the manufacturer down.
Advertising is also a big expense in the traditional model. It's also less effective than the word of mouth and personal testimonials that serve to replace advertising in network marketing.
These cost savings mean that the manufacturer can afford to pay the independent consultants handsomely for their efforts in placing their products in the hands of consumers.

What is an Independent Consultant?
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