What is network marketing

The definition of network marketing is found in two words: “network” and “marketing”.

A “network” is an interconnected system of things or people and in network marketing it is an interconnected system of people with a common goal of building a network marketing business and promoting the company’s range of products.

“Marketing” is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved October 2007) This definition is approved by the American Marketing Association Board of Directors.

As can be seen from the above definitions of “network” and “marketing”, we can safely define “network marketing” as an interconnected system of people who communicate, deliver and exhange offerings that have value for customers, clients, partners and society at large.

Network marketing is a very cost-effective way for manufacturers to distribute their products through a network of independent distributors and they are rewarded by a simple and generous compensation plan that rewards very well those who are committed to work the business consistently for three to five years.

Most manufacturers distribute their products the conventional way by spending millions of dollars on advertising to support the chain of agents, wholesalers and retailers who will distribute the products and are given certain profit margins to reward them for doing so.

The cost-effective way of network marketing lies in its performance based rewards, no commission is paid out until a product is sold and this saves the company a lot of money that would have been spent on advertising and other promotions which does not guarantee sales that that will cover the costs.

Network marketing is actually viral marketing because the distribution network grows and expands exponentially like a contagious virus that causes a pandemic. A network marketing business can expand rapidly from one country to 20 to 30 countries much faster than conventional marketing which is way below the cost effectiveness of network marketing.

Network marketing is perfect for manufacturers who don’t have the capital to do conventional marketing and see network marketing as a very cost-effective way to distribute their products or services and want to expand their business to many countries in the shortest time.

Robert Kiyosaki wrote a book on network marketing: “The Business School For People Who Like Helping People”. He highly recommends network marketing as a business school for those who don’t have the capital to start a conventional business. Donald Trump recommends network marketing too and see it as “viable and reliable source of income.”

Donald Trump and Robert Kiyosaki co-authored the book: “Why We Want You To Be Rich.” and both of them highly recommend network marketing in this book.

Robert Kiyosaki said: “I am often asked if Network Marketing is a Pyramid Scheme. My reply is that corporations really are pyramid schemes. A corporation has only one person at the top, generally the CEO, and everyone else below.”

“Network marketing is a simple, duplicable and profitable home-based business without the headaches, heartaches, high overheads and stress of a conventional business.” Bruce Seah, Asia No.1 Home-Based Business Coach

“Network marketing has come of age, it’s a way to financial independence for millions.” Stephen Covey, Business Consultant and Author

Network marketing is highly recommended by many successful entrepreneurs’ trainers and authors and it is simply a very effective way to market products and services through a network of independent distributors.

Most people are doing network marketing, they are recommending products and services, the only difference is there is no system to track their recommendations, they are not paid, and they are not building a passive income. Network marketers recommend products and services, there is a system to keep track of their work, and they are building a passive income that can give them financial freedom!John Milton Fogg said: “The reason people are not in network marketing is because they don’t understand it.”