What is Network Marketing? A Guide

After hearing the word marketing, we remember it as if someone is selling something to us, but in today’s time many ways of marketing have come, one of which is network marketing , in this blog post you are going to understand easily. What is Network Marketing? How does it work? And how many types are there?

What is Network Marketing?

Network marketing is a business model in which thousands of people connect with one person of a company indirectly and help in selling the company’s product or service.

There are typically three basic types of systematic strategies used to make money- lead generation, hiring, and management. Network marketing is divided into three categories: single-tier, two-tier and multi-level.

Suppose you are in a network marketing company, then you will make a network with one person and tell him if you sell me a product to 50 people, then you will get this much commission, in the same way that person will say the same to other people and others. People will say this to others that in some time your product will be sold to 50 people.

The business model mentioned above is called  network marketing .

  • Direct Selling:  Network marketing companies promote and sell their products directly to customers rather than through a well-defined distribution channel. Participants are tasked with selling items, and are paid a commission for each sale they make.
  • Self Employed Business Man (IBO):  Participants are referred to as IBOs because they act as if they are running their own company.
  • Distributor:  Most multi-level marketing companies refer to their members as distributors rather than sellers.
  • Downline:  The member recruited by the distributor or the new distributor registered by these members is called downline. All distributors profit from their downline sales.
  • Upline:  All distributors in the hierarchy above a member’s individual sponsor. The one who is predominant in this is called the upline. On sales made by downline partners, all upline distributors get a commission.
  • Plan:  This makes a list of all the ways sellers can make money. The plan also shows how salaries vary based on sales volume and the number of partners recruited.
  • Sponsor:  A person who brings a new employee to the company.
  • Associate:  A person who is brought into the company by a sponsor. The sponsor is compensated for the sale of the partner.

What are the types of network marketing?

Network marketing works at different levels. This makes it of 3 types-

  • Single-Tier Network Marketing
  • Two-Tier Network Marketing
  • multi level network marketing

Single-Tier Network Marketing

You join the affiliate program of a company to sell its products or services through single-tier network marketing. You don’t need to recruit other distributors, and you get paid programmatically as long as you keep selling the company’s products on your own. Avon, a well-known cosmetics firm, undertakes single-tier networking marketing.

Some internet affiliate plans pay you to drive traffic to their website. Single-tier networking also includes pay-per-click (PPC) and pay-per-lead (PPL) affiliate plans.

Two-Tier Network Marketing

Two-tier network marketing, unlike single-tier network marketing, requires some recruitment, but your compensation is not entirely dependent on it. You get compensated for direct sales (or traffic to a website ) as well as direct sales or recommended traffic generated by affiliates or distributors you choose to work with.

Multi level network marketing

Some direct selling organizations use multi-level marketing (MLM) to encourage existing distributors to recruit new distributors in exchange for a portion of their affiliate’s sales. Distributors also benefit from selling the product directly to the customers.

Amway, a well-known multilevel marketing organization offering health, beauty and home care items, is an example of a well-known direct selling organization.

How does network marketing work?

Multi-level marketing (MLM), cellular marketing , affiliate marketing, consumer-direct marketing, referral marketing and home-based business franchising are all terms used to describe network marketing.

Network marketing companies often build layers of salespeople, in which one salesperson networks to sell products to several other salespeople.

You connect with 2, they connect with another 8, those 8 connect with another 32. That’s how the network is built and you can get your product or service to more people.

People who start a new tier (or “upline”) receive commissions paid on their sales as well as sales from individuals in the tier they started (“downlines”).

Over time, a new tier may emerge, providing additional commissions to the top tier as well as the intermediate tier.

The earning of a member of network marketing depends on the sales of the product as well as the recruitment.

Anyone joining a network marketing team goes through two processes: the first is training and the second is sales.

Benefits of Network Marketing

There is no restriction on the size of the network marketing organization. This is because businesses can partner with a large number of people to become a distributor. Distributors can work closely with other sub-distributors to increase the sales of the company.

Companies need not depend on advertising to advertise their products as they have a solid and powerful distributor network that connects the customers directly.

The distributor structure also affects the retailer’s profit margin, which is considered an expense by firms. These profit margins are passed on to the distributor, and corporations are relieved of their financial burden.

Another advantage is that corporations don’t have to spend as much money on storage and distributorship as they once did. This is due to the fact that distributors are responsible for these costs.

In short, network marketing is one of its kind marketing techniques. The people involved find it unique and believe that the market is expanding at an amazing pace. In the near future, we might be able to see some massive expansion in the world of network marketing. Till then, we can see its pleasant growth.


The first step after joining is to become a distributor of the company i.e. you will be selling products from now on.

Because the business requires selling and recruiting distributors, the firm you are joining or your sponsor will provide you with comprehensive product and sales training.

To help you get started with the company, the company provides you with complete product information as well as promotional materials such as advertising materials and marcom tools.

You’ll learn about the intricacies of your company’s product line, the quality and safety requirements they satisfy, how they compare to the competition, what to expect from customers, and solutions to commonly asked questions, among others. Apart from things.

Most companies provide sales training as well as training to recruit newcomers, usually they organize a small workshop for that.


You are ready to begin work when the company has given you instructions on sales, product knowledge, and the tools and supplies you need, as well as a startup package. Your sponsor will be available during your training and will also assist you in starting the business.

Listing prospects, qualifying prospects, hiring prospects, meeting them and submitting an MLM business proposal, answering questions and helping them decide to join the network, and following up with a positive Making decisions on a regular basis will now be part of your sales process.

Inspire and work with them to sign up as distributors, receive product training, sell and supply them with tools, marketing materials and a getting started kit, as well as help them grow their network Process continues.

You will strive to increase retail sales apart from hiring and developing your distributor network. Listing prospects for retailing includes your family, friends, neighbors and the local community, as well as your coworkers, your firm, and other firms with whom you know contacts. This is how a simple network marketing business model works.

Network Marketing Example 

ABCD Company is a company that manufactures household cleaning products. They have a very wide product line to serve various purposes like Dishwashing Solutions, Floor Wax, Shoe Polishers among many others. Company founder Stan Matthews deeply regards network marketing as the future of sales. Since he started the company, he has developed a network of very well trained individuals who not only sell products directly but also recruit other representatives in many states across the country.

They started five years ago and now the company has more than 5,000 representatives across the country and this first group of individuals is now very wealthy and acts as the marketing directors of the company for various sectors. The network marketing techniques employed by Stan have been very successful and he sees further development in the following years.

My Last World

We hope that after reading this blog post your question is what is network marketing?, How does it work? And what are its benefits? You will get the answer of all these questions easily.

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