How Network Marketing Works

Table of contents:

How Network Marketing Works
How Network Marketing Works

Video: How Network Marketing Works

Video: How Network Marketing Works
Video: What is Network Marketing and How Does it Work 2023, November

Despite the fact that the network marketing boom has already passed, this form of cooperation is still one of the most popular. Its main principle is that each new participant must bring several more to the project.

How Network Marketing Works
How Network Marketing Works


Step 1

Typically, network companies use the same operating principle (although it may differ from company to company). First, the person is invited for an interview, which tells all the prospects of the job, as well as the main opportunities. Such firms often use gross exaggeration. For example, a large passive income for six months.

Step 2

The main goal at this stage is for the person to believe in their own strength. This increase in motivation can play a bad joke when a person realizes what difficulties he will actually have to face. After that, the candidate is offered to register. Sometimes the first membership fee is required for this, sometimes it is not. Large companies that have been operating for a long time (like Avon or Oreflame) use only legal schemes.

Step 3

Also at this stage, the person is told that the more new people register through him, the more income he will eventually be able to receive. This is the main feature of network marketing. Employees themselves promote their own company, but management still gets a lot of profit.

Step 4

A large-level scheme is often used. Its essence lies in the fact that a person receives a percentage of the profits of several levels of invitees at once. Let's say he invited person A, and person A invited person B. In this case, the candidate himself will receive interest from both people.

Step 5

Moreover, the more a person invites people, the more his own level will be. They are often referred to as attractive names like "Gold" or "Diamond". In general, promising mountains of gold is a notable practice of most "gray" network companies. However, such promises rarely coincide with reality.

Step 6

The profit depends on the activities of the employee and the people he invited. Most often, you need to sell a product. At the same time, it is often the employee himself who has to make the initial order at his own expense. The profit is made up of the difference between purchases and sales.

Step 7

There are also network companies, the main purpose of which is deposits and new participants, while there is no need to work at all. A striking example is the MMM financial pyramid. Money circulates between participants, while most of the profits are received by those who are at the top, but new users may not see the money at all.

Step 8

It is recommended to avoid such firms. If you decide to get a job in a network company, then be sure to read the reviews. Work only with proven organizations that have been operating for several years.