What Is Network Marketing?

Just what is network marketing? Are MLM (Multilevel Marketing) and NWN (Network Marketing) one and the same thing? These are questions I’ve been asked, so I’ll try to sort out the confusion and clarify how these two business models differ, and where the similarities lie.

 

Network marketing can be extremely lucrative … or not

Both of these business models are without doubt very lucrative income platforms for those who persevere at it and become successful. The reality is, however, that most people are not successful.

I’ll go into the reasons for that in more detail on other pages at this site, and I’ll show how anyone can indeed succeed at Network Marketing — provided they do it in a different way from what many network marketing companies recommend and teach.

In this regard, you may want to download this free eBook titled The 7 Great Lies of Network Marketing, in which the author goes into some detail about why people have not succeeded in this kind of business, and how to change that. (The link opens a new window/tab.)

But first, let’s try to unravel what for many people is still not absolutely clear — just what is network marketing?

 

What is Network marketing – in a nutshell

  • You ‘join’ a network marketing company as an independent, self-employed, self-managed marketing associate (or whatever term that company uses).
  • You buy some of that company’s products, usually monthly to a certain minimum value, and this qualifies you to earn an income by promoting the benefits to others — often emphasising both the products and also the opportunity for them to earn an income.

 

The benefits of becoming a registered customer

The network marketing associate’s role is to market (promote) the benefits of becoming a direct buying customer of that company’s products or services. Such benefits often include one or more of the following:

  • unique products with some benefits or distinct advantages that the user cannot obtain elsewhere;
  • lower purchase prices than someone would pay if they were to buy from a registered direct buying customer/associate instead of becoming a direct buyer themself;
  • the opportunity to earn an income by marketing (promoting) the compoany’s products and advantages to their own network of contacts;
  • the opportunity to earn ongoing ‘passive’ income for originally securing such customers in the first place;
  • bonuses and rewards in cash or other benefits such as sponsored holidays locally or abroad.

 

 

How Network Marketing differs from MLM

Multilevel Marketing

Note, a network marketing company is not the same as a multilevel marketing (MLM) company, which still sells through a multi-level system of individual customers who have such roles as master distributors, distributors, wholesalers, retailers (called by various names, according to which company it is). Some companies have only two levels of customers, like master distributors (who buy direct) and distributors (who buy from a master distributer). The names are not important right now; it’s the principles I’m trying to clarify.

With an MLM company, the multi-level marketing and distribution functions are handled by private individuals and not by large companies. Examples would be kitchenware, jewellery, cosmetics, and so on. Unlike pure network marketing companies, there is still a multi-level distribution chain, where each level pays a different price, so that each distributor can earn some profit on sales to other distributors ‘below’ them in the MLM hierarchy or ‘downline’.  

 

Network Marketing

In a Network Marketing company, however, the company sells and distributes directly to every one of its registered customers, many of whom want to be active marketing associates to earn some income too. The marketing associates all pay the same price, so there is not a multi-level pricing structure for the associates; and no associate has to buy from another associate. They are truly in the direct buying business model, where everyone has the same earnings potential and someone you secured as a new direct customer can end up earning much more than you do if they’ve worked more effectively at it than you have.

It seems that these differences between MLM and NWM have become a bit blurred in the last few decades, either through unclear thinking or in a deliberate attempt by MLM companies and their distributors to want people to think they work in the same way as the successful network marketing companies, which came after MLM was already going strong. NWM is, in a way, a refinement or improvement over MLM, though some dedicated MLMers would no doubt disagree with me.

So, when someone asks the question: What is network marketing?, it will help to clarify that the answer is about network marketing and not about multilevel marketing, and if necessary explain the difference.

 

 

Related pages

Informative video by a Network Marketing expert

Network Marketing online – 7-day free trial

Direct selling explained

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The Renegade Network Marketer
The Renegade Network Marketer

 


 

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