Network Marketing, also referred to as Multilevel Marketing or Direct Selling, is often misunderstood. Network Marketing is a very sensitive and controversial topic – there is a lot of misconception surrounding this industry. If you are still not into Network Marketing, and unless you attend an open meeting or research and learn about it from the right sources, you will always remain in the dark. The truth is, many people thrive on Network Marketing. It has been in the limelight recently during the Covid-19 pandemic providing livelihoods to millions and facilitating the Indian Government’s vision of Aatmanirbhar Bharat (self-reliant India). This article lists the most asked questions about Network Marketing.
Network Marketing – An Intro
Before we proceed to know about the commonly asked questions about the Network Marketing business, it is important to know about its working and what business model it incorporates. Network Marketing is a business model that involves person-to-person sales by representatives of a company – popularly known as Independent Representatives or Sales Representatives or Distributors. These Distributors often work from the comforts of their home and as per their convenient working hours. Network Marketing is built around people – it requires you to build your network of contacts, called your downline or business partners.
As an Independent Representative, you earn primarily by selling company services or products and recruiting further salespeople. However, your earning depends entirely on the MLM model that the company incorporates – it could be a Single-Tier MLM model or Two-Tier MLM model or a Multilevel-Tier MLM model. The salespeople in your downline operate just the way you do – their lead generation, recruitment, and sales also allow you to earn, and this income is known as residual income. Most reputed companies who implement this scheme come under the Multilevel-Tier MLM model. Knowing the basics of Network Marketing, let us now know the commonly asked questions about it that you should know before stepping into the lucrative world of Network Marketing.
Is Network Marketing a gimmick and a get rich quick scheme?
A big NO. Network Marketing is not a gimmick or fairy tale! There could be a few exceptions wherein some companies use the illegal Pyramid scheme and operate as an MLM company and vanish in no time, suddenly duping their investors, which has earned a bad name for the Network Marketing Industry. The truth is, Network Marketing is a genuine business, and you do not get rich overnight. You need to put in efforts and devise appropriate marketing strategies to succeed. Also, you need to be careful when choosing your MLM company – you should verify its existence history, know the MLM model it incorporates, and ensure that it is registered with the government.
Is Network Marketing a Pyramid scheme?
Network marketing is not a Pyramid scheme. There could be companies that operate in the guise of MLM companies using the Pyramid scheme – you need to beware of them. Recently, the Government of India has drafted regulations requiring direct selling companies to be registered with it and have rendered the Pyramid scheme illegal. The move will safeguard the interests of the investors from falling into a trap. Further, you should also know what a Pyramid scheme is. The Network Marketing and Pyramid scheme businesses might appear to have similarities. But there is a big difference that makes the Pyramid scheme businesses illegal. In pyramid schemes, income is generated solely by recruiting individuals, and unlike in a genuine Network Marketing scheme, there are no products or services involved.
Further, only those at the top make money in a Pyramid scheme, while the downlines usually are losers. Distributors get paid on product movement and hire more salespeople in a legitimate Network Marketing business, which depends on the MLM model that the company incorporates as part of its business strategy. Also, unlike in the illegal Pyramids scheme business, in Network Marketing, no matter at what level you are positioned or at whatever stage of the program you join, you can always move to the highest income level and make money – yes, even more than those above you in the network!
Can Network Marketing be done successfully part-time?
Yes, many do it as a part-time activity to boost their primary income. Many start a Network Marketing business on a part-time basis without giving up their existing source of income. While many continue as their part-time business, those who start earning high make Network Marketing business their full-time income source. The dream of attaining financial independence, having free time for self, and even working part-time is attracting many to the world of Network Marketing.
How much money can one make, and does one have to sponsor a lot of people?
Your earning depends purely on the sincere and systematic efforts that you put in. As the saying goes, “What you Sow is What you Reap”, holds in Network Marketing business too! It would help if you implemented the most appropriate and effective marketing strategies that will propel your business. Selling the products or services of the company is equally important as recruiting more salespeople in your downline network. However, it is not necessary to sponsor many people, even one or two can do, but ensure whoever you sponsor are active and interested in pursuing their entrepreneurship dreams.
Does one have to maintain an inventory and deliver products to consumers?
You do not need to go door-to-door to sell your offerings. We are living in a fast-transforming digital world backed by advancements in technology. You can use the methods you are comfortable with – it could be direct online mailing or distributing catalogues, it could be telemarketing or meetings over coffee, and so on. In the age of the Internet and advanced eCommerce activities, most Network Marketing companies allow their Distributors to order directly without maintaining any inventory of products. Further, the products ordered by you for your consumers are directly delivered by the company to them. It effectively means – you do not need any space to store products, nor do you have to take pains to deliver the products to your customers.
Conclusion: Be Assured, Network Marketing is a Genuine Business
The Network Marketing Industry has been boosted by several initiatives of the Indian Government like Make in India, Vocal for Local, Women Empowerment, and so on. Further, the government’s recent regulations safeguard the interests of those who want to collaborate with the Direct Selling companies with a desire to be future entrepreneurs. So, go ahead, be confident, and be assured. Embrace the Network Marketing business and fulfil your aspirations. Best of Luck.
