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HOW NETWORK MARKETING WORKS
Network marketing (multi-level marketing, abbreviated. MLM) - one of the newest and most effective areas in business, at the same time, causing a lot of misunderstanding.
This is not a production or trading business in the sense that we usually imagine. What is multi-level marketing? "Marketing" means the delivery of goods or services from a manufacturer to a consumer.
The expression "multi-level" means a system of rewards people delivering goods or services to consumers. MULTI (many) means more than one. Level (level, level) - rather means "generation". Thus, we can call the system "product promotion with the help of several generations." More modern is the term "network marketing".
Traditional product promotion scheme
(manufacturer of → advertising → transport → intermediaries → transport → store)
At each stage along the path of goods from the manufacturer to the store/consumer, the cost of advertising, packaging, storage costs, rental premises, labour costs, taxes, etc. are added to the initial cost of the goods. Thus, up to 300% is added to the initial cost of goods.
Network Product Promotion
(producer-distributor or → consumer)
The main objective of network marketing is to reach the maximum number of people, as a result of which certain goods or services will be sold.
The idea is simple - to make the consumer of the product a distributor at the same time, i.e., first of all, an informant about the company's products or services, and not the seller. In network marketing, there is no sale in the traditional sense of the word, although it is necessary that there is a turnover. If he does not exist, no one will be able to receive money to receive remuneration for the work done.
The turnover in network marketing arises and is maintained due to the fact that people information about the products or services of the company of their friends and acquaintances and identify from them those who need it.
Firms that sell their goods or services in the usual way spend about 30% of the cost of production on their advertising. Firms that have taken the path of network marketing do not spend money on advertising. Advertising takes place through direct communication between consumers of products, and only those people who participate in business can purchase products from the company, they receive income from sales and saving money on advertising.
At the same time, a person receives income not only from what he distributes but also from the fact that people whom he attracted to this business are spreading.
Thus, an extensive network of distributors is created.
Now network marketing has become a school of mass social entrepreneurship. The conditions are to fulfil the well-known formula for success in MLM:
1. Learn to work yourself.
2. Teach to work those whom he himself attracted to the business.
3. Teach them to train the next generation of employees.
Thus, a self-reproducing system is created, which monthly increases the volume of its activities and brings more and more income.
Finally, network marketing combines the incompatible concepts of "nobility" and "business" into one inextricable whole. By attracting people to network marketing structures, it is you who give a chance: on the one hand, to become a consumer of goods or services that are very necessary for them, and on the other hand, through the consumption of this product you give them the opportunity to join the world of network marketing and radically change their lives. Of the existing dollar millionaires in the United States, 20% made their fortune in MLM.
Today, along with the growing needs of people for material renewal, there is a sharp increase in the need for human communication, for spiritual growth, the driving force of which is always human culture and, in particular, business cultur
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